Tax practitioners brace for gambling income surge

As sports wagering becomes more accessible, tax practitioners must prepare for clients with gambling income. TIGTA recently reported that around 150,000 individuals who won over $15,000 failed to file tax returns on those earnings. Tax practitioners need to emphasize that all gambling winnings are taxable, regardless of how they are reported. Casual gamblers should report winnings as “other income,” while professional gamblers must use Schedule C for their reporting. April Walker, AICPA’s lead manager for tax practice and ethics, advises: “It’s a good time to have a conversation about gambling activities.” With the IRS increasing enforcement, careful tax planning is essential to avoid penalties. Taxpayers should maintain detailed records of their gambling activities to substantiate any deductions for losses.