Got a little money riding on Super Bowl XLVI? You definitely aren't alone.
Every year Super Bowl Sunday is the biggest single day of betting. Last year, U.S. gamblers bet an estimated $8.6 billion on the NFL championship game. The 2012 rematch of the New York Giants and New England Patriots is expected to attract more than $10 billion in wagers.
The good news for folks who aren't football fans but who want to get in on the action is that you can bet on a lot of ancillary Super Bowl events.
Known as prop, or proposition, bets, these are wagers on such things as will the coin toss be heads or tails, how long will it take for Kelly Clarkson to sing the National Anthem, how many times will Gisele Bundchen (Pats QB Tommy Brady's email sending wife, just in case you didn't already know) be shown on TV, will one of Madonna's halftime performance costumes include fishnet stockings and what color Gatorade will be dumped on the winning coach?
Why do goofy Super Bowl bets earn this week's honors?
Because winners of any of the NFL championship game bets must report that payout on their 2012 tax returns.
Gambling winnings count as taxable income: Yes, it's time for me to once again remind y'all that gambling proceeds, as well as prizes and rewards (like the Citibank frequent flier bonuses), are taxable.
You can read more about taxes on Super Bowl winnings in my previous big game posts:
- Super Bowl is prime time for advertisers,
betting and, yes, taxes
- Bet on it: Gambling winnings are taxable
- Get your Super Bowl bets down
- Super Bowl bets mean IRS losses
- IRS is big Super Bowl loser
- Win a Super Bowl bet? It's taxable (Bankrate)
You also can check out some of this year's prop bets, just in case you're in Nevada and have a few dollars to put down.
Taxable, but not always reported: As you can tell from the posts (or even just the headlines), a lot of winners don't tell the Internal Revenue Service about their good luck.
But you're supposed to, even when it's an amount that's too small to trigger third-party reporting. That is, your winnings weren't large enough to require that the payer send you a 1099 that's copied to the IRS.
So enjoy today's game. I hope your team wins as long as your team is the New England Patriots.
And the IRS will be eagerly awaiting details on your winning bet next filing season.
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