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Did you know that your Super Bowl winnings are taxable? I’m Clark Palmer with your Bankrate.com personal finance minute.
Legal betting operations have rules in place to help the IRS collect gambling winnings. If you want to collect winnings from bingo, keno or slot machines you have to give the casino your tax id. That means your winnings show up on form W-2G.
The IRS has also started demanding reports from poker tournament sponsors when winnings will exceed $5,000.
The solution might be to legalize more gambling. Legislation was introduced in the House and Senate to regulate and tax online poker and nonsports betting. regulations from such a law could help the IRS get more winners to follow tax laws.
But reporting your gambling winnings could still be confusing. You can’t simply net your wins and losses. You have to add all your winnings and report them as income. That’s why you need to keep very good records of your gambling activities.
For more help with filing your taxes, visit Bankrate.com. I’m Clark Palmer.