Raleigh, North Carolina — Many people believe that they can deduct their gambling wins and losses on their taxes, just like capital gains and gains. cryptocurrency.
But that's not the case in North Carolina.
If you win something, you may have to pay taxes under state law and may also owe money to the federal government.
Like Cherry Franklin and Gene Washington, most people who bet on sports don't think they win enough to pay the taxes.
“Right now, I'm not going to worry about it until we win big,” Franklin said.
“So I don't make big bets. I bet a little bit here and there just for fun,” Washington said.
But under state law, you still owe taxes on your wins, no matter how much you lose.
Let's say you bet an even number of $20 on North Carolina State University. And they won, so I won his $20. So now I have $40 – and I bet on them again – and this time they lost, so I lost $40.
Now I have nothing in my account – a net loss. But I still owe income tax on the $20 I won, even though I never cashed it out.
At the federal level, Uncle Sam will allow you to offset some losses, but only up to the amount you won, and only if you itemize your deductions, which most people don't do. .
At the state level, gambling losses cannot be deducted at all.
Nathan Goldman, a North Carolina economist, said gambling winnings have always been considered taxable income. But with sports betting apps, tax officer To track how much you've won.
“If you spend more than $600, you'll receive a W-2G in the mail. It's the same as any other document you receive from things like your employer or your brokerage firm if you're investing,” Goldman said. Told.
If you don't win $600 on any of them. sports bookAlthough tax forms are not available, you will still owe federal and state taxes on your winnings.
“You have to self-report,” Goldman said. “It's up to you to do that. And I think a lot of taxpayers probably make the mistake of not reporting it. But that's not what the law says.”
