The IRS does offer tax benefits to bettors; many people are unaware of this fact. As a result, many taxpayers remain opposed to claiming their proper gambling income each year. The IRS can audit financial records and auction taxpayers’ assets to recover unpaid taxes on gambling income for any year.
Be Prepared
The most important advice from the IRS is to keep a record of all the gambling sessions throughout the year; some bettors find it easy to keep a small pad in a pocket or purse. The IRS advises bettors to create a new record for each gambling session; each time the taxpayer gets up or sits down to wager. Taxpayers need to record the time, date, location, wins or losses, and any witnesses to the transactions. This suffices as a proof of records for the year; the burden of proof is on the taxpayer, according to the IRS.
Recoup the Losses
Aside from telling taxpayers how to account for their wins and losses, the IRS also offers bettors a credit for the losses throughout the year. There are different rules for professionals and non-professionals; the IRS allows taxpayers to claim credits on losses equivalent to sports betting profits that year. This means that non-professional gamblers get money back for their losses that do not exceed the income from the winnings, if they claim it on the taxes. Professional gamblers can claim their full losses for the year. The more taxpayers know about betting and taxes, the more likely they will be to receive substantial credits and returns.
No taxpayer wants to be wrapped up with the IRS in a serious bind; this will ruin the taxpayer’s good credit standing with everyone. The IRS gives taxpayers credits for claimed losses through the year and tells gamblers how to protect themselves when betting in online sportsbooks, like Bookmaker.com. Informed bettors are happy taxpayers.