Winnings must be reported using Form 1040NR.An Updated Explanation to How it Works Single Bet Betting? Non-residents of the US must also report gambling winnings to the IRS, which are generally taxed at 30%. If you’ve paid tax on sports betting winnings while across state lines, you’ll still have to report the winnings to your resident state, but you’ll usually receive a deduction or credit for taxes paid to a non-resident state. Each state that has legalized sports betting has its own set of rules and tax rates, so you’ll need to check what these are for your locale. Most states have a tax on income earned within their jurisdiction, and that includes winnings on sports betting. Of course, that still means you won’t have to pay any taxes on your sports betting winnings. If you won $5,000 but lost $10,000, you may only deduct $5,000 from your total income. Keep in mind you can only deduct losses up to your total winnings. You can deduct those losses from your winnings, meaning you’re only liable to pay tax on $2,000 - a much smaller amount of $480. However, say you lost $3,000 in that same period. Without deducting your losses, you would have to pay roughly $1,200 in tax on these winnings.

Say you win a total of $5,000 over the course of the year. It’s not all bad news when it comes to the taxman - you’re able to deduct your losses to reduce the amount of sports betting tax you’re liable to pay. Your bookmaker will usually mail your W-2Gs directly to you - for example, BetMGM mails all W-2Gs by January 31. W-2G forms are based on your aggregate wins and losses over a 24-hour period, rather than an annual basis. Wins of $5,000 and greater are taxable immediately and taxes must be withheld by the bookmaker.Sports betting wins of at least $600 but less than $5,000 are taxable, but no tax is withheld by the bookmaker.In certain circumstances, sportsbooks and casinos are legally required to issue these forms and withhold 24% in federal taxes, and report these winnings to the IRS: You may also need to complete Form W-2G, which is used to report gambling winnings and tax withholdings. The amount of tax you’ll have to pay is based on your overall taxable income.

You’ll need to declare your sports betting winnings on your annual tax return, specifically within ‘Other Income’ on Form 1040. Off the bat, bettors should know that gambling wins are fully taxable - whether it’s sports betting, casino games, lotteries, scratchcards, or any other form of gambling.

Beginner's guide to sports betting