How are you doing now that your NCAA men's college basketball tournament brackets are in tatters? The only consolation is that you have lots of company in the 2013 version of March Madness.
Did anyone outside of Fort Myers, Fla., pick Florida Gulf Coast University to beat anybody, much less two higher ranked teams including Georgetown, to get into the Sweet 16?
And Harvard beat New Mexico. Really? Harvard?
If, however, you did have a working crystal ball and are still in the running to win your office's betting pool, with all the attrition you could end up taking home a nice pot after the championship game is played April 8.
The Internal Revenue Service is rooting for you.
Betting income, even the money from the office pool where most people drop in a few bucks more as an act of camaraderie than with an eye on the winnings, is taxable. Despite your reason for betting and even where the gambling is illegal, the IRS still wants its due of your winnings.
You let the federal tax man know about your winnings on line 21, designated as "other income," on Form 1040.
Serious bettors know this. In Las Vegas, where March Madness money is placed on games at a rate second only to Super Bowl betting, winners of large amounts must give the paying casino sports book their tax identification numbers. Tax law says that 25 percent is withheld from winnings of more than $5,000 from any sweepstakes, wagering pool or lottery.
The automatic withholding also applies to betting proceeds that are 300 times or more the amount of the bet. In dollars, that means the federal tax of 25 percent is withheld when your $2 bet on your favorite team produces a $600 win.
If you don't share your Social Security number with the casino, it will take out 28 percent of your winnings for Uncle Sam.
Then early in the next year, you'll also get a W-2G with details for you -- copied to the IRS -- of how much you won.
But without an official form, what are the chances that the IRS will know you took home a nice chunk of change from your office pool? True, it's not a slam-dunk for the tax man to know about under-the-table earnings. But that doesn't keep tax examiners from looking. And do you really want to worry about that?
So report your gambling good luck on your tax return. Heck, it might not even cost you that much in taxes.
If you made losing bets during the tax year, you can use those to offset your winnings. You might even be able to zero out the winning bets.
You'll need to keep detailed records of all your wins and losses to justify the deduction, which is claimed on Schedule A. But the effort definitely is worth it tax-wise when you do hit it big.
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Veteran contributing editor Kay Bell is the author of the book "The Truth About Paying Fewer Taxes" and a co-author of the e-book "Future Millionaires' Guidebook."