Tax Implications of March Madness

Wolters Kluwer Reminds March Madness Enthusiasts That the Ides of April Soon Follows

It’s March Madness time and office pool participants are studying the NCAA brackets.  Wolters Kluwer Tax & Accounting points out that according to the IRS, March Madness betting activities could be considered gambling, business or a hobby – all of which are taxable income. The handling of expenses and the reporting of that income can be different based on the category.

Under the Tax Code, any income earned from gambling is taxable whether the gambling is legal or illegal. Placing a bet in the NCAA bracket office pool is considered to be gambling, even though participants may claim some skill in selecting their bracket winners. If an individual can establish profits from gambling for three of the last five years or that the activity is engaged in as the primary source of income for the taxpayer on a full-time basis, the individual can be considered to be engaged in a trade or business. Even fantasy sports winnings are considered taxable income as a hobby or a business.

The following infographic shows key rules that apply to reporting March Madness activities to the IRS.

March Madness Infographic


Wolters Kluwer Tax and Accounting

Wolters Kluwer Tax and Accounting is a leading provider of software solutions and local expertise that helps tax, accounting, and audit professionals research and navigate complex regulations, comply with legislation, manage their businesses and advise clients with speed, accuracy and efficiency. Wolters Kluwer Tax and Accounting is part of Wolters Kluwer N.V. (AEX: WKL), a global leader in information services and solutions for professionals in the health, tax and accounting, risk and compliance, finance and legal sectors. We help our customers make critical decisions every day by providing expert solutions that combine deep domain knowledge with specialized technology and services. Wolters Kluwer reported 2016 annual revenues of €4.3 billion. The company, headquartered in Alphen aan den Rijn, the Netherlands, serves customers in over 180 countries, maintains operations in over 40 countries and employs 19,000 people worldwide. Wolters Kluwer shares are listed on Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices. Wolters Kluwer has a sponsored Level 1 American Depositary Receipt program. The ADRs are traded on the over-the-counter market in the U.S. (WTKWY).

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