--(BUSINESS WIRE)--Wolters Kluwer Tax & Accounting:
What: It’s March Madness time and office pool participants are studying the NCAA brackets. Wolters Kluwer Tax & Accounting points out that according to the IRS, March Madness betting activities could be considered gambling, business or a hobby – all of which are taxable income. The handling of expenses and the reporting of that income can be different based on the category.
Why: Under the Tax Code, any income earned from gambling is taxable whether the gambling is legal or illegal. Placing a bet in the NCAA bracket office pool is considered to be gambling, even though participants may claim some skill in selecting their bracket winners. If an individual can establish profits from gambling for three of the last five years or that the activity is engaged in as the primary source of income for the taxpayer on a full-time basis, the individual can be considered to be engaged in a trade or business. Even fantasy sports winnings are considered taxable income as a hobby or a business.
The attached infographic shows key rules that apply to reporting March Madness activities to the IRS.
Who: Tax expert Mark Luscombe, JD, LL.M, CPA, Principal Federal Tax Analyst at Wolters Kluwer Tax & Accounting, can help sort through the various rules, requirements and reporting forms for gamblers, businesses or hobbyist, as well as the different ways in which expenses and losses are handled.
Contact: To arrange interviews with Mark Luscombe or other federal and state tax experts from Wolters Kluwer Tax & Accounting on this or any other tax-related topics, please contact:
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