It has been an exciting month as we’ve watched 68 teams whittle down to 32, 16 and now the Final Four!
As usual, March Madness did not disappoint as we are once again looking at the potential of a NCAA Cinderella story in the making. This weekend between Passover Seders and while prepping for Easter dinner, all eyes will be on Loyola-Chicago vs. Michigan and Villanova vs. Kansas. While we are all watching these much anticipated games, guess who’s eyes will be on us…or more specifically, our winnings? You guessed it, the IRS!
As stated in a recent Accounting Web article “Technically, March Madness pools are a form of gambling, subject to the usual tax rules for these activities. Therefore, if you win, you’re required to report the taxable income on your federal tax return.”
So before your clients take their winnings to the bank, make sure you have fully informed them about their tax liabilities and opportunities. They will be sure to thank you for it later!