Don't Mess With Taxes

UPDATE, Monday, Feb. 10, 2025: Yes, that's green font in honor of Philadelphia's Super Bowl LIX win last night. I'm taking solace in that it took a Texan, Houston native Jalen Hurts, to lead the Eagles to the title. Did you place a prop bet on last night's NFL championship game? If it paid off, you owe tax on the winnings. Check out the results of some of the most popular Chiefs-Eagles prop bets.

Super Bowl LIX is Sunday. It's a rematch between the Kansas City and Philadelphia.

KC is looking to take home a third consecutive Lombardi Trophy. The Eagles and their fans are hoping for a better outcome than the last time the teams met in 2023. The Chiefs won that game, Super Bowl LVII, by a scant three points.

Those points mattered not only on the final scoreboard reading, but to bettors.

Big game, big bets, big money: As everyone knows by now, the National Football League (NFL) annual championship game is the biggest single betting day of the year. The American Gaming Association (AGA) estimates that U.S. bettors will place record $1.39 billion in legal bets on the Sunday, Feb. 9, football game.

While much of that amount will be place by folks with a serious interest in the game itself, a lot of dollars also will be dropped on proposition bets. Known popularly as prop bets, these wagers focus on game minutiae, such as which team will score first, which player will catch the first touchdown pass, or what will be the longest field goal kicked.

Then there are the prop bets that are ancillary to the actual game. Here are some annual prop bet standards:

• How long it will take for the national anthem singer to finish the song?
• Will the coin toss come up heads or tails? Will the coin toss winner defer?
• What color Gatorade will be poured over winning players and coaches? I'm going with red, since a variation of that color is the main hue for both teams.
• Will the winning coach thank god or his family first?

Halftime prop potential: Then there’s the halftime show, which is when a lot of viewers finally tune in. It also provides myriad prop bet options.

Kendrick Lamar, fresh off his five Grammy wins last Sunday, is headlining Super Bowl LIX halftime, so there are many options for music loving bettors.

A perennial prop bet is which song will be played first. Until his latest award-winning hit “Not Like Us,” Lamar’s biggest track was “Humble,” and it remains, as I type, the betting favorite as the opener for his Super Bowl show.

Swifties' bets are back: And, of course, there are the players’ family members, who will get a lot of attention from television cameras and bettors.

One of my favorite familial prop bets is what Jason Kelce, a retired Philadelphia Eagles player and older brother of Kansas City Chief’s tight end Travis Kelce, will wear to the game. The siblings faced off in that 2003 championship game, but now Jason will just be a fan. At prior games as a spectator, he’s been known to choose some outlandish attire.

But of course, most of the Kelce attention will be on an almost-family member, Travis’ girlfriend Taylor Swift. By now, the fans and bookies are familiar with the superstar singer’s attendance at her beau’s games.

This year, Swift Super Bowl prop bets include —

• Who will she be sitting next to?
• What color will her lipstick be?
• What kind of headgear will she wear?

But my favorite is, “Will Travis propose to Taylor on the field after the game?”

I’m a romantic, but if I were betting, I’d go “no.” If the Chiefs lose, you don’t want that life-changing question tainted by the defeat (or suffer another defeat if she declines). And the couple is in the spotlight enough, so I’m thinking if a betrothment ever does happen, it will be private.

DraftKings Sportsbook lists 33 prop bets as Swiftie Specials. Bet365 Sportsbook also has its own 29 props categorized as Swiftie Specials. They include —

If you’re wondering what is the best Super Bowl LIX novelty prop bet, the ESPN Sports Center video below (via TSN) has some thoughts.
    

There’s also Syracuse.com’s downloadable prop bet sheet; a similar printable one from Sports Illustrated; The Sports Geek’s broadcast prop bets; five prop bets that BetFTW! promises are sneaky good; the Ringer’s most fun Super Bowl LIX prop bets; and from the Bleacher Report, 15 prop bets to liven up your Super Bowl party.

If you place any bets, on the game or the surrounding craziness, good luck!

Pay tax on your winnings: All this, of course, brings me to the underlying reason, which is as regular as the Super Bowl, for this post.

While prop bets are fun, if you win one, you owe federal tax on the amount. Even on the goofy game-related ones that sometimes do pay off big time.

In fact, all gambling winnings are taxable income. And Uncle Sam's tax collector is especially thrilled that since 2018, more gamblers are turning to legitimate betting outlets to place wagers.

That year, the U.S. Supreme Court ruled that all states have the right to legalize and launch sports betting through regulated apps. Since then, 38 states and the District of Columbia have done just that. Sunday’s 59th Super Bowl will the seventh NFL championship game since the high court’s decision.

By using legal betting methods, the gambling establishment generally takes down bettors’ personal data, including tax identification number (usually your Social Security number) and shares it and winning specifics with the Internal Revenue Service.

That required reporting means the tax agency will know if you don’t include the earnings on your Form 1040.

You can read about how to comply with your gambling winnings filing in my post reporting all your income, including gambling winnings, on Form 1040 Schedule 1.

You also might find these items of interest:

• NFL wins, Super Bowl host city taxpayers lose
• IRS missing $1.4 billion in tax due from unreported gambling winnings
• 15%-to-25% tax rate range is part of proposed internet gambling template

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