Should money earned from online gambling be reported to the IRS?
Question by RockStar: Should money earned from online gambling be reported to the IRS?
Online gambling was made illegal in the US a couple of years back but there are a few (mostly Canadian) sites that still accept US players. Even though it is illegal in the US to gamble online, should an individual include those profits on their federal tax return?
I guess my question is: If one reports the income then that individual admits to ‘breaking the law’ but if they don’t then they are breaking the law by withholding taxable income from their tax return.
Answer by angela
I took an H & R Block tax course and we were told that the IRS wants everyone to report all income, whether obtained legally or illegally. They would like taxes paid on money made by hookers and drug dealers, etc. If you claim it, you can put it under other income on the front of the 1040 and call it gambling winnings.
if you win more than $600 before getting cashed out, they might send you a 1099 which you would HAVE to report on your tax return then