If You’re Betting On A Great Football Season, Don’t Forget Tax Law Changes
This morning, I was greeted on my laptop with two words: Draft Day? It seems that my brother is eager to get our fantasy football season going. He’s got a point since the National Football League (NFL) officially kicked off its season last night.
(A petty sister might note that his Patriots lost to her Eagles in the Super Bowl last year, but not me.)
Fantasy football is a big deal in my family. We only play for bragging rights, but many leagues around the country this season will play for money. Still other sports fans will eschew the fantasy teams altogether and will bet directly on the games (Atlanta was the odds on favorite last night against Philadelphia).
Just as with gambling, fantasy sports winnings are reportable on your taxes. But – at least for now – fantasy sports are considered games of skill. That means that fantasy winners are treated a little bit different for tax purposes. For example, a fantasy sports winner may receive a form 1099-MISC, Miscellaneous Income, while winners at a casino or gaming house may receive a form W-2G, Certain Gambling Winnings.
(You can read more about taxes and fantasy sports here.)
Of course, gambling winnings are reportable even if you don’t receive a federal form W-2G, Certain Gambling Winnings – either because of the amount or because it’s a friendly wager. A form W-2G is issued when winnings, after the cost of playing, are $600 or more and at least 300 times the amount of the wager; the form will also be issued if winnings are subject to federal income tax withholding, including backup withholding and regular gambling withholding. “Regular” gambling withholding is a flat 25% rate if your winnings from a gambling pool minus the cost of your wager are more than $5,000.
Read more here: http://bit.ly/2xAohn5
Shared from: Forbes