Let’s say you’re an avid sports fan and you spend a lot of your free time watching games and keeping score. You’re also savvy enough to know how to play winnings from online gambling wisely. You make a couple of lucky bets and then discover you’ve won a big bonus on one of the sites you regularly visit. What do you do with your winnings?
You might think that a sports gambler would report the winnings from bingo to the IRS. After all, bingo is a game of chance. Plus, you’re technically required to report any winnings over $10,000 to the IRS. In theory, the IRS could argue that your winnings from online gambling are income and you owe them some additional taxes.
However, there’s still some wiggle room. Since the IRS doesn’t define online gambling, the legality of various forms of electronic games is up for interpretation. It varies from state to state and from country to country, so be sure to check the laws where you live.
Thankfully, there are ways to get around paying extra taxes on your winnings. You can claim you had no idea your hobby would turn into cash, and because of that, you had no reason to report your winnings. Or, you could say that you did indeed play for amusement and that the money was a bonus. You might even go so far as to say that playing for fun is the entire purpose of bingo. With these arguments, you could get back some of the taxes you otherwise owe from your winnings. But you’ll have to be prepared to explain yourself to the IRS and ensure you keep copies of your documents.
Report It To Charity
Another way to report your winnings without owing taxes is to give the money to a qualified charity. In most cases, gambling winnings are considered donations and aren’t taxed. You don’t have to be a philanthropist to feel good about giving to a charity. Just remember that there are certain restrictions when it comes to giving money to charities. You must meet certain requirements to be able to claim the deduction. One of the requirements is that you have to give away at least half of your income. If you meet these requirements and still want to keep the money, you can report it to charity and get a tax break.
One more way to avoid taxes on your winnings is to claim all the expenses you had while gambling. When you win money at bingo, you’ll have to pay tax on the prizes you cash out. However, you can still claim the costs of your food, drink, and lodging while playing as a deduction. The key is to keep good records and make sure you report all your wins and losses. This is easier said than done, but once you get used to doing it, everything becomes much simpler. You won’t have to worry about what rules to follow or whether or not you’re legally required to report income. You can just do your thing and stay out of trouble. And if you do get audited, you’ll be ready with all the records needed. This is probably the best option if you want to keep your winnings, but don’t want to pay any extra taxes on them.
If you want to keep your winnings without owing taxes, the best thing to do is to either give the money away or report it to charity. But if you really want to keep the money, the best thing to do is to claim all the expenses you had while gambling. Make sure to keep good records and be ready to comply with any tax audits that may come your way. Above all, be sure to abide by the law where you live and play. The last thing you want is to get audited by the IRS and have all that money taken away. And, of course, if you happen to win the lotto one day, make sure you do report it to the IRS as soon as possible.