Iowa Gambling Taxes

[Clonehomer]

It’s very stupid, but what triggers a W2G is an individual bet that pays out $600+ AND is 300:1 odds or greater. It’s dumb because 99%+ of gamblers will never hit a bet that triggers one. Also, if you request one from the books, they will say no. When I asked for one at DK, they at least sent me a summary of my gross winnings and losses so I will be covered there, but I have tens of thousands of dollars over hundreds of bets elsewhere that I will have to go back and manually calculate my results. The books should send one to everyone IMO. I’d be surprised if there isn’t something done about this in the future with sports betting legalization continuing in more places as I’m sure there will be a lot of money not reported since folks aren’t receiving forms to let them know what to report.

So this is where I'm confused about the W2G.

From Intuit:

If you take home a net profit of $600 or more for the year playing on websites such as DraftKings and FanDuel, the organizers have a legal obligation to send both you and the IRS a Form 1099-MISC. If you receive your winnings through PayPal, the reporting form may be a 1099-K.

So why was the law written to only worry about net profits on these sites if only winnings matter?

Also, as far as legislation around sports betting, I wouldn't be surprised if the industry pushes for changes to how losses are calculated. I've seen a stat that as many as 90% of households will take the standard deduction with the 2017 tax bill and low mortgage rates. So with the industry targeting more casual gamblers now, something has to give. If the IRS starts cracking down on the casual bettor, it could severely impact the sports betting industry with most people only counting the wins and not the losses on their taxes.

So maybe there's a compromise there. Report everything, but make losses easier to report or move to only net profits.

 

[DreamyFred21]

300:1 as in +30000?

Correct. I have accounts at six different sports books, all of which I would qualify for if it was only the $600 piece, but I only received a tax form for my DK DFS account because I hit a $3,000 win on a $5 entry. Got nothing from any of the other books and when I asked, they said I did not qualify for a tax form and they would not be providing me one.

 

[Pat]

It’s very stupid, but what triggers a W2G is an individual bet that pays out $600+ AND is 300:1 odds or greater. It’s dumb because 99%+ of gamblers will never hit a bet that triggers one. Also, if you request one from the books, they will say no. When I asked for one at DK, they at least sent me a summary of my gross winnings and losses so I will be covered there, but I have tens of thousands of dollars over hundreds of bets elsewhere that I will have to go back and manually calculate my results. The books should send one to everyone IMO. I’d be surprised if there isn’t something done about this in the future with sports betting legalization continuing in more places as I’m sure there will be a lot of money not reported since folks aren’t receiving forms to let them know what to report.

I don’t think that’s quite right. Fromhttps://turbotax.intuit.com/tax-tips/irs-tax-forms/how-to-use-the-w-2g-tax-form-to-report-gambling-income/L2H5Zy3Yn

A gaming facility must report your winnings on a W-2G when:

• Horse race winnings of $600 or more (if the win pays at least 300 times the wager amount)
• Bingo or slot machine winnings are $1,200 or more
• Leno winnings, less the wager, are $1,500 or more
• Poker tournament winnings, minus the wager or buy-in, are more than $5,000

 

[DreamyFred21]

I don’t think that’s quite right. Fromhttps://turbotax.intuit.com/tax-tips/irs-tax-forms/how-to-use-the-w-2g-tax-form-to-report-gambling-income/L2H5Zy3Yn

Read the bullet point about horse racing - literally says the exact same thing that I did with the 300:1 caveat. None of the other points even reference sports betting, so the books must issue with the same criteria they use on horse racing. All I can tell you is that I have $600+ payouts regularly, and I did not get anything except for the one account that I hit a 600:1 payout on.

Besides, receiving a form has nothing to do with what you report. Legally, you are responsible to report regardless of whether or not they send you one. I was only replying because I’m sure there are people who may be waiting to get something from the books, and it already would have come by now if they were going to get anything. You’ll have to manually go through and review your bets at this point.

 

[MercAzavel]

Hey there! Iowa gambling taxes can be a bit confusing, especially if you're new to the game. Here's a quick rundown of how it works: 1. Any gambling winnings under $600 are not taxed. 2. Winnings over $600 are taxed like normal income at your income bracket. 3. The $600 threshold applies to the total winnings, not just the amount over $600. Keep in mind that this information applies to land-based casinos in Iowa, if you're looking for information on casino online or online kasinot taxes, you'll need to look into the laws of the country you're playing from. Good luck and have fun!