preparation — March 28, 2016

March Madness 16 - Winners & Losers

by Bob Williams

gambling income

March Madness. The Road to the Final Four. Whatever you call it, the annual NCAA College Basketball tournament captivates millions of sports fans every year. It also pulls in millions more who aren’t basketball fans per se, but get hooked into the drama and competitive stories of the tournament.

The tournament is the Holy Grail for those who look forward to the annual American phenomenon of the Office Pool. There are countless variations, of course, from just-for-fun pools to legal wagering on various angles of the competition – such as what seed number will win the tournament?

The first round got started March 17, and the first round was beset with upsets.

California, Arizona, Baylor, Texas, West Virginia, Purdue, Seton Hall and Michigan State all felt the sting of being sent home in the first round by teams ranked far below their status.

Since then, the rankings have been more on-target, although Kansas may have a different idea about Villanova after the Jayhawks, seeded No. 1 in the South, got topped by No. 2 Villanova, sending the Wildcats to the Final Four.

On April 2, it’s Villanova vs. Oklahoma; and North Carolina (our sentimental favorite) going against Syracuse. The winners play for all the beans on April 4.

Which leads us to mention another aspect of March Madness: Reporting the effects of your good fortune – or of your misplaced enthusiasm. Any way you slice it, any gambling proceeds are subject to income tax.

If you get a Form W-2G from the gaming organization, you should use the W-2G form in our online software. Make sure you enter the numbers in Box 1 of the printed form into Box 1 of the online form, and so on.

If your winnings were not reported on a W-2G, you should use Form 1040 – Income instead. Click the Review button at top left in your return, scroll down to the federal forms search box, and type in “1040 – Income.” You can select the form in the pop-up menu, and enter your numbers in the Gambling Winnings field on line 21.

For those bitten by the Upset Bug, the IRS allows you to claim your gambling losses – but only to a point. Gambling losses belong on 1040.com’s Other Misc. Deductions screen. But remember that gambling (or gaming) losses can be taken only to the extent of your winnings. So if you came up empty on the office pool, there’s not much you can do to recoup.

So warm up those nachos, ice down an extra round of drinks and get the rumpus room arranged for maximum viewing of that big-screen TV. May the best team win!

 

 

 

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