Latest news with #AprilWalker
Yahoo
6 days ago
- Business
- Yahoo
How sports betting taxes work and what you might owe
Sports betting only became legal in the United States in 2018 after the U.S. Supreme Court struck down a 1992 federal ban and ruled that states could individually determine what forms of gambling were legal within their boundaries. This opened the floodgates for various state legislatures to decide whether to allow sports betting. Currently, 40 states and the District of Columbia authorize the practice, and 34 permit online sports betting, according to the American Gaming Association. This has tax implications for millions of gamblers — who are also taxpayers. There is no ambiguity here, according to tax experts. 'Broadly, winnings from sports betting are taxable income,' said April Walker, senior manager for Tax Practice and Ethics with the American Institute of CPAs. Sports betting winnings are taxed under the Internal Revenue Service's designation for gambling income and losses. If your winnings total $600 or more and are at least 300 times the amount wagered, then a payer, such as a casino, is required to issue you a Form W-2G. While supplying the form is the responsibility of the payer, Walker noted, you are still liable for reporting and ensuring taxes are paid on those sports betting winnings, whether or not you receive the form. If you're dealing with a mobile sports gambling provider, like DraftKings or FanDuel, the reporting standards are a little different, according to New England-based accounting firm Baker Newman Noyes. If you reach net earnings above $600 or 300 times your original wager, you can also receive a Form 1099-MISC from an online sports wagering organization that will report your net earnings from the previous tax year. Net earnings would be calculated as your cash winnings minus any cash entry fees and adding any cash bonuses received from the platform. Individual tax filers must report total gambling income as 'Other income: gambling' on line 8b of Schedule 1, 1040. The only exception is if you are filing as a professional gambler, meaning someone 'engaged in sports betting primarily for profit rather than only as a hobby,' per the Journal of Financial Planning. In this case, the filer would use Form 1040, Schedule C to report profit or loss from a business, and they would note winnings as revenue and be able to deduct their losses directly. Self-employed filers — in this case, professional gamblers — must pay self-employment tax, which is 15.3 percent, half of which is subject to deduction, for Social Security and Medicare. This embedded content is not available in your region. To answer the tax rate question, we must work backward. Taxpayers whose winnings exceed $5,000 and 300 times the amount wagered will automatically have 24% of their total payout withheld by the payer, according to Walker. This rate could be higher in states that have additional income tax, in which case the 24% federal rate would be withheld on top of the state's personal income tax rate. Still, when it comes time to file your income taxes, this withholding doesn't ensure you've paid the required amount of tax. Rates range from 10% to 37%, depending on your total income, so based on what tax bracket you end up in at the end of the tax year, you'll either get a refund or have to pay out a higher amount from your winnings. Read more: How tax withholding works Perhaps the most pivotal — and confusing — part of understanding how to report gambling income on your federal income tax return is factoring in your losses. The correct method, according to Walker, comes down to what the IRS refers to as 'sessions.' This philosophy comes from a 2015 IRS notice on slot machine play, indicating that total wins and losses need to be calculated by the day they were made. Each day counts as an individual session, so rather than net your total losses against your total winnings, you will need to calculate the end amount of each session, or day, and determine which days were a loss and which days ended with winnings. Still, the only way that losses can be offset against gambling winnings is if you itemize your deductions rather than take the standard deduction, which is $15,000 for single tax filers on 2025 taxes. Using the session method, you could add your total losses on Schedule A, line 16 as gambling losses. Whether you can itemize your deductions to offset your winnings when it comes to state income tax depends on which state you're filing in. Nine states, including North Carolina, Connecticut, and Rhode Island, do not allow itemized deductions for gambling losses, per an article in the Journal of Financial Planning. Even professional gamblers can only offset their total winnings with their losses and get to zero. There is no tax refund for losses that exceed the total amount of winnings, Walker said. To minimize sports betting taxes, the key is having a demonstrable record of all of your wagers, where and when they occurred, proof that they occurred (like receipts and tickets), and evidence of your total amount of winnings and losses. This will be particularly useful if you find yourself audited by a tax authority. 'Gambling has been around for quite a while, and so the rules on that have not changed,' Walker said. 'The difference is that there might be more people who are doing it on a regular, daily basis, and I would encourage them to understand how important it is to do their bookkeeping so they are not having to scramble after the fact and if they are able to itemize, and take advantage of all of their losses.'
Yahoo
23-02-2025
- Business
- Yahoo
How to create an online account at IRS to get transcripts, make payments, more
The last thing many people want to do is take yet another extra step when it comes to doing their taxes. But the option to create an online account with the IRS could well be worth considering, according to tax professionals. This tax season, the IRS is highlighting improved and expanded features for its online account for individuals, which taxpayers can create at The online accounts are not a requirement, so you can still e-file a return without creating such an account. The biggest selling point: By creating an online account, you can avoid the need to call the IRS for all sorts of questions. You can find answers day or night without having to call the IRS hotline at 800-829-1040. "The world itself is more digital," said April Walker, lead manager for Tax Practice & Ethics with the American Institute of CPAs. Many people are increasingly comfortable paying their bills online, including their tax bills. They'd rather pay online than put a check in the mail. Walker, who set up her own online account with the IRS about five years ago, said it wasn't the easiest process to verify her identity then to set up the account but she was able to do it. More information exists now on though, she said on how to verify your identity to set up these accounts. During the pandemic, the tax filers did experience some difficulties when the IRS "Get My Payment" tool periodically would clunk out. That tool was designed to help people track their coronavirus relief payments and allow taxpayers to provide direct deposit information to receive the Economic Impact Payments more quickly. And about four years ago, many people had complained about having difficulty setting up the online account at because they couldn't get past the authentication process. But that's not the case now, according to tax experts. The IRS has expanded what's being offered through these online accounts, and it could be helpful to many people who do their own taxes and taxpayers who need to make payments. "You don't have to set up an account to be able to make payments," Walker said, "but if you set up an account you can very easily see that your payment was made and that it was applied to your account." In addition, she said, some people who make estimated payments, including retirees and others, lose track of what payments they've already made and they can use the online account to keep better track of what they've paid already. You don't want discrepancies on your tax return, she said, with the amount you think you paid for estimated taxes in 2024 and the amount that the IRS has on record. Someone who is still on the job and receives salaries and wages often is able to avoid going through the hassle of making estimated quarterly payments. If you owe a lot in taxes each year, the IRS notes, you can ask your employer to withhold more tax from your earnings. You'd file a new Form W-4 with your employer. And you can use a special line on Form W-4 to enter the additional amount you want your employer to withhold. Sometimes, the goal is simply to get your tax planning in order — or figure out a new way to make payments. "With the same ease that taxpayers have when banking online or placing an online shopping order, they can log in and get the latest on their payment history, balance, and more," according to an IRS alert about its online accounts last year. Creating the account does take extra work. The IRS requires you to have an account with to access the online account relating to taxes. 2025 tax season: IRS cuts may mean refund delays and long waits. File early before potential cuts, CPAs say To get started, you'd need your photo identification — such as a driver's license, state ID or passport — to verify your identity. And you'd need access to a computer that has a camera to make sure that everything is matching. You might need to update your browser settings. It's best to understand the instructions upfront before you try to create the account. The site has a useful tip sheet online called "IRS and for how to create an account and how to troubleshoot some issues. If you have an account from a state government or federal agency, the IRS notes, you can sign in without a need to sign up again by going through a verification process. Individuals who have already verified their identity with would simply need to login, according to the company, and pass a two-factor authentication process, such as sending a code to your phone. " is a service created, maintained, and secured by a private technology provider," according to a tip on how to create an online account by the Taxpayer Advocate Service. "If you do not have an account, you must create a new account using your online account at says its services offer consumers a way to "securely prove their identity online, expanding digital access while protecting privacy and preventing fraud." The company states online that is "the only digital wallet that meets the federal government standards for secure multifactor authentication." You go to to create an online account for individuals. "The federal government does not have access to data unless an individual provides explicit consent to share certain data elements," according to an spokesperson. does not sell data, according to its spokesperson, and does not share data without the explicit consent of an individual. " role is to ensure the user is who they are claiming to be so the right user is matched to the right records at the right time and to prevent unauthorized access and scams," according to the spokesperson. Right now, many people might be concerned about the privacy of their financial data. The Washington Post, for example, reported that Elon Musk's cost-cutting group is seeking access to a heavily guarded IRS system that provides detailed financial information about every taxpayer, business and nonprofit in the country, according to three people familiar with the activities. USA Today reported that the Department of Government Efficiency is seeking direct access IRS computer systems that have vast amounts of sensitive data. While such news is unsettling, it isn't reason alone to not use an online account. Information that is in a taxpayer's online accounts is already in Internal Revenue Service system, whether your create an online account or not, said Nina E. Olson, executive director of the Center for Taxpayer Rights. "I don't think the account, per se, increases someone's exposure," she said. Once you sign up for an IRS online account, you can see key details that you can use, if needed, to file this year's tax return. You can spot your adjusted gross income from last year's tax return, if you cannot find it. You can access your tax records through the IRS "Get Transcript" tool. Or you can request an Identity Protection PIN. Or you can authorize another person to represent you before the IRS or view your tax records. You also can get account transcripts that include wage and income records. And you can make a payment online, set up payment plan options, or check your balance to see how much you still owe the IRS. The feature also promises to offer expanded alerts to scams and schemes. To be sure, you often are able to get this information through other channels. If you lost last year's return, for example, you can request a transcript by mail if you don't want to go online to and click on "Get Your Tax Record." If you do call the IRS, it's important to know that IRS customer service representatives can't access your online account. "They also don't have the same view as what is shown in online account," according to the IRS. The IRS notes that a taxpayer's balance will update no more than once every 24 hours, usually overnight. And, typically, you'd need allow one to three weeks for payments to show in the payment history. The IRS also notes: "Only the taxpayer should log into their account. Credentials should never be shared with others." Contact personal finance columnist Susan Tompor: stompor@ Follow her on X @tompor. This article originally appeared on Detroit Free Press: IRS suggests making online account for key info, expanded features Sign in to access your portfolio
USA Today
23-02-2025
- Business
- USA Today
How to create an online account at IRS to get transcripts, make payments, more
How to create an online account at IRS to get transcripts, make payments, more Show Caption Hide Caption Tax season begins: New IRS tools aim to simplify filing Tax season has officially begun, and the IRS started accepting returns on Monday. Fox - 32 Chicago You can get account transcripts by creating an online account with the IRS. Tax filers first need an account with to access their online IRS account. The last thing many people want to do is take yet another extra step when it comes to doing their taxes. But the option to create an online account with the IRS could well be worth considering, according to tax professionals. This tax season, the IRS is highlighting improved and expanded features for its online account for individuals, which taxpayers can create at The online accounts are not a requirement, so you can still e-file a return without creating such an account. The biggest selling point: By creating an online account, you can avoid the need to call the IRS for all sorts of questions. You can find answers day or night without having to call the IRS hotline at 800-829-1040. "The world itself is more digital," said April Walker, lead manager for Tax Practice & Ethics with the American Institute of CPAs. Many people are increasingly comfortable paying their bills online, including their tax bills. They'd rather pay online than put a check in the mail. Walker, who set up her own online account with the IRS about five years ago, said it wasn't the easiest process to verify her identity then to set up the account but she was able to do it. More information exists now on though, she said on how to verify your identity to set up these accounts. During the pandemic, the tax filers did experience some difficulties when the IRS "Get My Payment" tool periodically would clunk out. That tool was designed to help people track their coronavirus relief payments and allow taxpayers to provide direct deposit information to receive the Economic Impact Payments more quickly. And about four years ago, many people had complained about having difficulty setting up the online account at because they couldn't get past the authentication process. But that's not the case now, according to tax experts. Why you might want to create an online IRS account The IRS has expanded what's being offered through these online accounts, and it could be helpful to many people who do their own taxes and taxpayers who need to make payments. "You don't have to set up an account to be able to make payments," Walker said, "but if you set up an account you can very easily see that your payment was made and that it was applied to your account." In addition, she said, some people who make estimated payments, including retirees and others, lose track of what payments they've already made and they can use the online account to keep better track of what they've paid already. You don't want discrepancies on your tax return, she said, with the amount you think you paid for estimated taxes in 2024 and the amount that the IRS has on record. Someone who is still on the job and receives salaries and wages often is able to avoid going through the hassle of making estimated quarterly payments. If you owe a lot in taxes each year, the IRS notes, you can ask your employer to withhold more tax from your earnings. You'd file a new Form W-4 with your employer. And you can use a special line on Form W-4 to enter the additional amount you want your employer to withhold. Sometimes, the goal is simply to get your tax planning in order — or figure out a new way to make payments. "With the same ease that taxpayers have when banking online or placing an online shopping order, they can log in and get the latest on their payment history, balance, and more," according to an IRS alert about its online accounts last year. Creating the account does take extra work. The IRS requires you to have an account with to access the online account relating to taxes. 2025 tax season: IRS cuts may mean refund delays and long waits. File early before potential cuts, CPAs say Preparing to create an online IRS account To get started, you'd need your photo identification — such as a driver's license, state ID or passport — to verify your identity. And you'd need access to a computer that has a camera to make sure that everything is matching. You might need to update your browser settings. It's best to understand the instructions upfront before you try to create the account. The site has a useful tip sheet online called "IRS and for how to create an account and how to troubleshoot some issues. If you have an account from a state government or federal agency, the IRS notes, you can sign in without a need to sign up again by going through a verification process. Individuals who have already verified their identity with would simply need to login, according to the company, and pass a two-factor authentication process, such as sending a code to your phone. " is a service created, maintained, and secured by a private technology provider," according to a tip on how to create an online account by the Taxpayer Advocate Service. "If you do not have an account, you must create a new account using your online account at says its services offer consumers a way to "securely prove their identity online, expanding digital access while protecting privacy and preventing fraud." The company states online that is "the only digital wallet that meets the federal government standards for secure multifactor authentication." You go to to create an online account for individuals. "The federal government does not have access to data unless an individual provides explicit consent to share certain data elements," according to an spokesperson. does not sell data, according to its spokesperson, and does not share data without the explicit consent of an individual. " role is to ensure the user is who they are claiming to be so the right user is matched to the right records at the right time and to prevent unauthorized access and scams," according to the spokesperson. A word about privacy Right now, many people might be concerned about the privacy of their financial data. The Washington Post, for example, reported that Elon Musk's cost-cutting group is seeking access to a heavily guarded IRS system that provides detailed financial information about every taxpayer, business and nonprofit in the country, according to three people familiar with the activities. USA Today reported that the Department of Government Efficiency is seeking direct access IRS computer systems that have vast amounts of sensitive data. While such news is unsettling, it isn't reason alone to not use an online account. Information that is in a taxpayer's online accounts is already in Internal Revenue Service system, whether your create an online account or not, said Nina E. Olson, executive director of the Center for Taxpayer Rights. "I don't think the account, per se, increases someone's exposure," she said. Once you sign up for an IRS online account, you can see key details that you can use, if needed, to file this year's tax return. You can spot your adjusted gross income from last year's tax return, if you cannot find it. You can access your tax records through the IRS "Get Transcript" tool. Or you can request an Identity Protection PIN. Or you can authorize another person to represent you before the IRS or view your tax records. You also can get account transcripts that include wage and income records. And you can make a payment online, set up payment plan options, or check your balance to see how much you still owe the IRS. The feature also promises to offer expanded alerts to scams and schemes. To be sure, you often are able to get this information through other channels. If you lost last year's return, for example, you can request a transcript by mail if you don't want to go online to and click on "Get Your Tax Record." If you do call the IRS, it's important to know that IRS customer service representatives can't access your online account. "They also don't have the same view as what is shown in online account," according to the IRS. The IRS notes that a taxpayer's balance will update no more than once every 24 hours, usually overnight. And, typically, you'd need allow one to three weeks for payments to show in the payment history. The IRS also notes: "Only the taxpayer should log into their account. Credentials should never be shared with others." Contact personal finance columnist Susan Tompor: stompor@ Follow her on X @tompor.
