Paying taxes is mandatory. It is your way of contributing to your government and towards your economy. This is an essential part of living in a society and giving your share in order to have a better and more sustainable future. This is true to all the jobs you do, but what about gambling taxes? What about the money you win from online gambling? Do your Bitcoin winnings become taxed?
Bitcoin is a decentralized method of transactions and is used to have a more private logbook. A lot of people use Bitcoin for a variety of reasons like to invest and buy but others use it to play online gambling, most notably, people residing in America. This is because in most states the laws on online gambling are still very confusing. Some states allow it, some states have decriminalized it, some other states have a total ban on it, and keeping up with all the new reforms etc can be a very tedious job.
Hence, Bitcoin and crypto is the solution that most Americans turn too. Crypto is very private because it works on blockchain technology. Thus creating a network of peer-reviewed transactions making it separate from any governing body like a bank or something of the sort.
This article will discuss gambling taxes with regards to bitcoin. Since it is used in a lot of US targeted online casinos, one must know what he or she has to do with the money once it is removed from the gambling wallet and into your account.
The IRS announced in 2013 that Bitcoin should be treated as property. Hence some taxpayers needed to change their returns. Bitcoin is subject to the same tax treatment as stocks. Your short term and long term gains will be taxed at their respective capital gain.
Long story short, for US citizens, you do need to pay taxes on your online winnings.
Do You Have To Pay
You will have to pay once you remove the money from your online gambling wallet. The number of winnings you have which are not removed from your wallet are not taxable as it is still considered betting money. But once you move your money from that wallet to a bank or a governing body of some sort, you will need to pay taxes on this money. All the money you win from online gaming is considered to go under gambling taxes and some money will be removed in order to pay your due to the government. Just like any sort of income, you get from your job, or freelancing, or selling a property, your winnings are still considered gambling taxes.
If you want to stay on the legal side of the law you should always report and file any crypto trades and transactions, It is always safe in order not to be considered like your avoiding taxes. Even though online gambling is not legal in most states in the US, Bitcoin is always considered property, that way if a player wins this in a foreign online gaming site, you will still have to report your winnings to remain on the legal side of this. The summary is, yes, you still have to pay gambling taxes, even if the site is a foreign one.
If you are looking for more information online, the United States Department of Justice website is a source. Take some time to search your queries and lookup problems you might have etc. A little bit of research will go a long way into easing your anxieties and creating a safe and legal environment for your money.
You can choose to opt to not pay gambling taxes, but this comes at a price. Any bank will always ask you where you got your money from when you start depositing large amounts of money in it. This goes without saying that the bank wants to stay in business and thus have to report everything and stay on the legal side of the law. Avoiding paying gambling taxes is not the smart way of going about things because the consequences and repercussions of such actions are grand
Paying Fewer Taxes
There is a silver lining to all this though. When coming to pay your gambling taxes, you don’t have to pay taxes on all your winnings, you have to pay on your overall winnings. This is imperative to understand because you might input the wrong figures. Let’s say you win $1000 but then lose $400 in a different game or match, you have to input $600 and not the $1000 figure.
Always pay your gambling taxes, it is inevitable to stay avoiding because one day your actions will catch up to you. The safest way is to keep a logbook of your winnings to stay accountable should anything happen.
In reality, gambling taxes and law can be quite complex, and keeping up can be a true hassle, but it is imperative that you know what you should do in order not to find yourself outside the law without even knowing. As long as you have proof of how you got the money, that you paid and that you tried your best in keeping with the law, you’ll be able to get on the right track on any future problems and inquiries.