It’s that time of the year again, March Madness is back! The exciting collegiate basketball tournament that takes the sports world by storm because of its unpredictable nature and thrilling moments. It’s also one of the most profitable time periods for sportsbooks around the country.

According to the American Gaming Association, American adults will wager an estimated $2.72 billion on the 2024 men’s and women’s March Madness tournaments. The thrill of winning a wager on a Cinderella story is un-matched, but keep in mind of the tax man who always comes looking for his share of the cut.

You may be wondering why you would owe taxes in the first place. Let’s examine how you owe taxes from your March Madness wins and what you can do to prevent any issues down the road.

March Madness Winnings Are Taxable Income

March Madness Winnings Are Taxable Income

The IRS considers gambling winnings to be taxable income. These earnings are reported in a separate category on your tax return called “other income.” No matter the amount you win, you should report the winnings correctly since you may be subject to penalties or an audit.

What Does the IRS Say About My March Madness Winnings?

According to the IRS, usually, “if you receive $600 or more in gambling winnings, the payer is required to issue you a Form W-2G. If you have won more than $5,000, the payer may be required to withhold 28% of the proceeds for federal income tax. However, if you do not provide your Social Security number to the payer, the amount withheld will be 31%. 

The full amount of your gambling winnings for the year must be reported on line 21 of Form 1040. If you itemize deductions, you can deduct your gambling losses for the year on line 27 of Schedule A (Form 1040). Your gambling loss deduction cannot be more than the amount of gambling winnings.”

Make a note of every bet you make, whether it is a win or a loss. You can cancel out the winnings by deducting the losses. This can be done by being able to provide receipts, tickets, statements, or any other type of record that shows both your winnings and losses.

Set Aside Some of Your March Madness Winnings 

Don’t forget to keep aside some of your March Madness profits for the payment of your taxes. Such neglect may result in penalties and interest charged on unpaid taxes. You should seek the service of a tax professional if you are confused about how to navigate the tax implications of your winning.


While you are celebrating your March Madness victories, don’t forget to pay your taxes. Whether you’ve hit a significant jackpot or just a moderate prize, the IRS requires that you report your winnings precisely and pay the taxes that you may owe. Keeping this in mind when you are hitting your wager off a buzzer beater, will make you and the tax man both happy.


If you need financial advice or a financial review, we would be happy to introduce you to a licensed advisor at our sister company, Asset Strategy Advisors (ASA).  ASA is an SEC registered investment advisor.  Contact us, or click HERE, to learn more.



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