In North Carolina, gambling winnings are subject to both state and federal taxes, regardless of the amount won. Even if you don’t cash out your winnings, they are still considered taxable income. This is true for people who bet on sports, like Cherie Franklin and Gene Washington, who often don’t realize that their winnings are taxable under state law.
At the federal level, you can only deduct losses up to the amount of your winnings if you itemize your deductions. However, even if you don’t receive a tax form from a sportsbook or other gambling platform, it is still essential to self-report your winnings and pay taxes on them. Failure to comply with tax laws can result in penalties and legal consequences down the line.
NC State economist Nathan Goldman explains that gambling winnings have always been considered taxable income, but with the rise of sports betting apps and other online platforms, it has become easier for tax authorities to track your wins. If you win more than $600 in a year from a sportsbook or other gambling platform, you will receive a W-2G tax form in the mail. However, even if you don’t receive such a form, it is still essential to report your winnings and pay taxes on them.
In conclusion, it’s crucial for individuals involved in any form of gambling to understand their tax obligations and comply with them fully. Failure to do so can lead to serious consequences down the line.
