You’re required to declare and pay taxes on any income you make from matched betting. The IRS treats your matched betting profits as taxable earnings, much like how you’d report your standard wages or salary on your annual tax return.

How much tax do I need to pay on matched betting income?

The tax rate on your matched betting profits can range from 0% to 37%, depending on factors such as your overall earnings, filing status, and other items listed on your tax return. Essentially, these profits are taxed in the same way as regular income. You can learn more about applicable tax brackets here.

It’s strongly advised that you keep detailed records of all your matched betting activities and transactions.

Do I still need to declare profits if sports betting isn’t legal in my state?

Yes. Even if sports betting is not permitted in your state, any income generated from matched betting must still be reported as taxable income.

How do I include matched betting income on my tax return?

Matched betting profits should be reported on your tax return, which is typically due around April 15 each year. Since these profits are considered ordinary income, it’s important to let your tax preparer know about the extra money you’ve earned from matched betting.

Because your matched betting activity will include both winning and losing bets, the process still results in net profit overall. You’ll win on certain sportsbooks and lose on others, but through each qualifying and free bet conversion, you’ll always end up ahead.

This means you’ll have taxable profit from your betting activity.

Can I deduct my betting losses?

In most cases, you can only deduct sports betting losses up to the amount of your total gambling winnings. For instance, if you won $10,000 and lost $5,000, you can only claim $5,000 in losses.

To claim these losses, you must itemize deductions on your tax return. Those who take the standard deduction generally can’t offset losses from gambling activities.

ProfitDuel Premium members can easily track and itemize every bet using the Profit Tracker feature for precise record-keeping.

What happens if I don’t report my matched betting income?

Failing to report your matched betting earnings can lead to IRS audits, penalties, added interest, and in severe cases, criminal charges. When a sportsbook or betting site issues you a tax form, a copy is also sent directly to the IRS.

If you leave this form out of your tax return, it’s highly likely the IRS will flag your return. You’re required to declare all gambling-related winnings—even if the sportsbook doesn’t issue you a form.

How are profits taxed if I place bets in multiple states?

Most U.S. states tax income earned within their jurisdiction, regardless of whether you live there. Typically, you’ll also have to include those matched betting profits on your home-state return. Your resident state may, however, offer a credit or deduction for taxes paid elsewhere, so you don’t get taxed twice on the same winnings.

Since tax regulations differ by state, it’s best to consult a qualified tax professional to ensure everything is correctly reported. Some states also disallow loss deductions, even against gambling income.

What should I do if a sportsbook sends me a tax form?

If you receive a tax document from a sportsbook or casino operator, start by confirming that the reported winnings are accurate.

In cases where the figure is incorrect, reach out to the sportsbook’s support or finance department to request a corrected statement. Once the numbers are confirmed, pass the document on to your tax preparer or accountant.

This article provides general information only and is not legal or tax advice. ProfitDuel is not a law firm and doesn’t provide professional legal representation. Since tax laws and interpretations change frequently, you should seek guidance from a licensed legal or tax advisor before filing your return.

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