Taxes, taxes, taxes. You just don’t want to think about taxes after you’ve won a carefully-construed sports bet at one of your favorite NY sportsbooks. We totally understand; however, as it is something we all need to do, we’re giving you the lowdown on sports betting winnings taxes in New York.
Do you need to file your winnings in your tax return?
Here is the answer to the question everybody is wondering about:
Yes, assuming you’re lucky and you collect winnings from your sports betting activity, these winnings are subject to New York state tax and federal tax. If you get lucky, make sure to keep a record of it, because you’re going to need it.
Because you’re betting online, there will always be a record — very much like a “paper trail” of your betting activities and your winnings. Additionally, some operators may withhold taxes on winnings.
It works the same with wagers placed at sportsbooks and casinos — land-based and online — as well as the New York State Lottery. All winnings that come from gambling activity are taxable in the State of New York.
Winnings that come from
sports betting in New York
are subject to your income tax; thus, you need to report these winnings on your tax return even if you don’t receive any other tax documentation for the income you received from your gambling activities.
On a federal level, gambling winnings are subject to a 24% tax rate. In New York, however, state tax can range between 4% and 8.82%. The higher your taxable income is, the higher your state tax rate will be, which will have an effect.
Even with winnings that are not cash, like a car, for example, you need to report the fair market value of these winnings.
When you
register with a NY sportsbook
or casino, from that point on, you are required to report your winnings if they are subject to federal income tax withholding, or if you win at least 300 times what you bet and the total amount exceeds $600. Nonetheless, you still need to report all of your winnings on your personal tax return.
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Filling out the forms
After accessing your From 1040, look for the “Other Income” line and add the amount there. In the case of gambling losses, you can claim them as itemized deductions, so also be aware of that.
Winnings that exceed a specific threshold, which is basically the same as the amount gambling agencies need to report, will set off a notification to the IRS. In this case, a W-2G Form will be issued to you.
Keep in mind that, if there was no tax withheld and you also didn’t receive a W-2G form, you still need to report all of your income that came from gambling winnings on both your New York state and federal tax return as required by the IRS.
Here are some tax strategies that will turn out to be really helpful:
Consult a tax professional if you are unsure about anything regarding tax returns — especially when it comes to gambling winnings and how you need to include them in your return.
File or keep all of your gambling records.
Make sure you know when to file your tax return and place a reminder on your mobile device, calendar, or any other device that can notify you in advance.
That’s enough about taxes for now, don’t you think? See you soon for some more fascinating news on sports betting in New York. In the meantime, for some light relief, check out two of our favourite deals from two of New York’s finest new sportsbooks, first the
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