Have you ever thought about taxes on online sports betting and how your winnings are taxed by the tax authorities? This article deals with taxes on gambling as well as the legality of online sports betting. The payment of taxes on sports bets is totally normal and the Tax Agency will consider it as such.
Betting income, like most of the income you receive during the year, is taxable. Regardless of whether or not you receive income from income tax, the income you “receive” must be reported in your personal income tax return. For example, you won’t have to pay taxes on slot machine games if your winnings are less than 1,200 euros. The casino or online gaming operator is not required to issue such documents until it’s winnings reach 1,200 euros for a single jackpot.
Also, keno winnings will not be taxable until the winnings reach 1,500 euros per game. In poker, the amount is € 5000 of a victory in a tournament. This means that each game has individual rules as to when the casino service is obligated to pay a tax debt. Obtaining a benefit does not determine whether the benefits are taxable or not. All benefits must be reported on your personal income tax return, whether or not they are taxable.
Therefore, it is important to keep a record of all earnings received throughout the year. Game revenues are subject to reporting requirements:
– All sports betting winnings
– Horse racing or dog racing
– Bingo Winnings
– lottery winnings
– game shows
– Lottery Winnings by Drawing
– prize money
– Gross winnings from all types of casino games
You cannot offset your earnings against your losses and report this net amount on your tax return. Betting losses are reported separately elsewhere on the tax return.
Few players know this, but tax legislation requires applicants to record their profits and losses per session. It’s questionable what this really means, depending on the form of play, but the tax office requires you to keep track of “sessions”. Since both profits and losses are required of you, it makes sense to keep a diary or logbook.
What information should this diary contain?
– The amounts you have earned or lost.
– 4.2. Date and nature of the specific action
– Name and address of the game establishment
In addition to the journal, the tax office recommends that you keep other documents such as account statements (to justify a withdrawal at an ATM), credit card statements, invalid lottery and/or lottery tickets, career sketches, and other similar documents.
Suppose you won 15,000$ in one year betting on sports games with an online sports betting provider. The amount earned by you is shown on the “Other Income” line on your tax forms. However, you can also report losses of 10,000$. Losses are presented as an individual deduction, which is shown in Appendix A. Despite having a net profit of 5,000$, the benefits of gambling are not recorded in the Tax Agency in this way. It is important to enter your profits and losses in the appropriate sections and not your net profits in the “Other income” line. (Source: Betting.org)
You may not think there is a big difference between this and fixing the net result, but this is a big mistake. If you don’t list your deductions, you can’t count your gambling losses. Many of the items on your return are also related to adjusted gross income. The income or loss from betting increases this index. This may limit your deductions in other areas, such as medical expenses or other individual deductions.
Underpayment of income tax can result in penalties and interest on your return. Many other remand factors are taken into consideration in determining whether or not you have to pay a fine, so you should consider your remand individually.
The tax authorities are aware that there are uncontrolled bets amounting to several billion euros a year. A large part of this money is not communicated and, therefore, is not taxed. The tax rules say that all gambling is taxable, but they don’t really expect an amateur to declare any income, however small, on his or her tax return.
However, if you become a professional gambler and start making a lot of money, you can be sure that they will want your share. If you are paid by bank transfer or check, this will all be easily seen if you are ever audited. Even if you keep the money in a sports betting account or a bureau de change, you will eventually have to pay for it.
If you become a truly successful sports bettor, the consequences of not reporting your income can be devastating. Ultimately, it is your decision, but the penalties can be much worse than trying to save some money.