3 Types of Sports Wagers on Which You'll Owe Taxes
Thought you won big in your Fantasy Football league? Think again.
Congrats! Your football bet won the jackpot. The prize may or may not be legal, but you can bet you owe taxes on it.
You won in Vegas. Football gambling is legal at casinos in Nevada and Delaware. The larger your prize, the more likely you (and the IRS) are to receive a tax form, such as a 1099-MISC or W2-G, to report the prize. No form? You’re still obligated to report winnings, regardless of size, on your tax return as “other income.”
You won playing daily fantasy. Daily fantasy football contests, such as those offered by FanDuel and DraftKings, are legal in some states, outlawed in others. Where legal, proceeds from these games are likely treated as “hobby” income. Any entrance fees that you wish to deduct from taxable income (if you itemize) must exceed 2% of your adjusted gross income.
You won the office pool. Most states consider office pools to be illegal lotteries but largely tolerate the practice. The IRS expects you to report even questionable windfalls. But that works both ways: Itemizers can offset gambling gains with any losses—legal or not.