Do you have to pay taxes on sports betting?

The big NFL showdown is next Sunday and millions of fans are putting money on which team will win. Last year, Americans wagered an estimated $1.39 billion in legal bets on football's biggest night, according to the American Gaming Association.

Most states have legalized sports betting in one form or another, which means there are tax implications if you win — whether it's the office football pool, a sportsbook app like DraftKings, a peer-to-peer app like Kalshi or a high-stakes bet at a Las Vegas casino.

The IRS considers all winnings from gambling fully taxable, whether it's from a casino, online betting site, state lottery, fantasy football league or a friendly wager between neighbors.

In addition to cash winnings, you need to pay taxes on the fair market value of cars, trips and other prizes you may win.

Winnings of $5,000 or more may require a casino or other company to withhold federal income taxes, typically 24% of your total winnings.

If you won at least $600 and 300 times the amount you wagered, any casinos, gambling platform or online sportsbooks should provide you with IRS Form W-2G (Certain Gambling Winnings) so you can declare the winnings when you file your return. The form might be issued on the spot or mailed later, but the business must get it to you by Jan. 31 of the following year.

Even if you make less than $600, though, you're still expected to pay taxes on any winnings. The bigger the jackpot, the more attention it will attract from the IRS.

Each wager must be reported separately, so keep a record of the date and amount of your wins and losses and hold on to any receipts.

You can't deduct gambling losses to lower how much you declare. For example, if you lost $600 on a college basketball game and won $1,000 on another game four months later, you need to report the full $1,000, not just the $400 difference.

Gambling losses can only be deducted if you itemize your return, which can be more of a headache. It only makes sense if you think your gambling losses and other deductions combined will be more than the standard deduction for your tax bracket.

If you do itemize your deductions, your gambling losses can't be greater than the sum of your winnings.

Gambling proceeds are considered income, and federal income tax rates range from 10% to 37%. How much of your winnings you owe Uncle Sam depends on your tax bracket.

Because gambling facilities are required to withhold a flat percentage of your winnings if they're large enough, there may be a difference between the tax withheld and what you owe on your tax return.

In addition, depending on where you live and where you gamble, you may also owe state and local taxes. (Check your state's guidelines to find out.)

If you had any gambling wins last year, you should report them on your tax return as "gambling income" on line 8 of Form 1040, Schedule 1.

If you had gambling losses, itemized deductions can be reported on Schedule A of Form 1040.

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