In North Carolina, gambling winnings are subject to state and federal taxes, regardless of the amount won. Even if you don’t think you win enough to owe taxes on your winnings, it is important to understand that any amount won is taxable under state law. This includes even if there are losses.
For example, if you bet and win $20 on a sports event but then bet and lose $40 on another event, you still owe income tax on the $20 you won. It doesn’t matter if you don’t cash out your winnings; they are still considered taxable income. At the federal level, you can only deduct losses up to the amount of your winnings, but only if you itemize your deductions.
NC State economist Nathan Goldman explains that gambling winnings have always been taxable income and with sports betting apps, it is easier for the tax authorities to track your winnings. If you win more than $600 in a year from a sportsbook, you will receive a W-2G tax form in the mail. However, even if you don’t receive a tax form, it is still required to self-report your winnings and pay taxes on them.
It is important to note that some taxpayers may choose not to report their gambling winnings, but it is crucial to abide by the law and pay the appropriate taxes on any winnings. Failure to do so can result in penalties and legal consequences down the line.
In conclusion, it is essential to be aware of the tax implications of gambling and ensure that you comply with the tax laws in your state. Failure to do so can result in severe penalties and legal consequences down the line.
In summary: Gambling winnings are subject to state and federal taxes regardless of how much money is won or lost. Failure to comply with these laws can lead to severe penalties and legal consequences down the line.
