Survey shows 62% of Americans are unclear on how to report sports bet winnings

Jackson Hewitt Tax Services found that most people don’t know how to report money won from sports betting.

US.- The American Gaming Association has reported that 68 million adults in the US plan to wager up to $15.5bn during March Madness. But Jackson Hewitt Tax Services has reported the results of a survey showing that 62 per cent of taxpayers are unclear on how to report money won from sports bets and other gambling.

According to the study, 48 per cent falsely believe cash winnings from sports bets are only taxable if their state has legalised sports betting. Actually, all income must be reported. In accordance with IRS reporting rules, earnings from sports bets or gambling are fully taxable and must be reported on Form 1040 as “other income” on both federal and state income tax returns.

Jackson Hewitt reminded players to keep organised records of winnings and losses and warned that each state treats gambling winnings differently.

Mark Steber, chief tax information officer at Jackson Hewitt, said: “We saw in our survey that taxpayers are confused and need the guidance of a tax professional to help them correctly report additional sources of income like cash winnings from gambling.

“As sports betting becomes more available and accessible to Americans, it is important for taxpayers to know the intricacies of federal and state tax law. If these earnings are reported incorrectly, or not at all, there is major risk for the taxpayer: they could be penalized from the IRS, their state, or even audited.”