I'm researching the topic on how many users actually report their winnings or losses to the tax authority, and from the current research there's a major discrepancy in the processes from country to country;
#1. Residents of the UK, Canada, and Australia don’t need to pay anything at all, as these governments view this money as the result of good fortune and do not view gambling as a profession. These earnings do not need to be reported, and nothing is owed on them.
#2. Malta is also pretty simple. Gambling winnings are only taxed if the player is a professional gambler, though this term is not strictly defined, but if you're earning above the "grace amount" of 12950 EUR, you can apply for it.
#3. The US taxes all gambling winnings as income. In fact, there’s even a special form for documenting your gambling wings: Form W-2G. This money is counted towards your yearly income and will be taxed at whatever bracket you fall into at both the state and federal levels. You must keep track of the type of gambling, the amount of the gambling winnings, and the general ratio of the winnings to the wager, as these will all be needed for filing. Conversely, any gambling losses that occur on a real money online casino platform can be tax deductible in an amount up to your total yearly winnings. Losses and winnings must be filed separately and not as a net amount.
Source: EsportsHeadlines.com Now I'm quite curious how other gamblers are managing this part of the story, if they manage it at all.
So, question to you, did you ever consider paying taxes on your gambling winnings, or deduct the taxes with the losses you've created? If not, what is the reasoning behind it?
