Sports Betting Tax Calculator — Federal & State Tax Owed

Choose the tax year — 2025, or 2026 and later, when only 90% of gambling losses are deductible — and your filing status. Then enter:

• Total winnings — every winning payout of the year. Do not subtract your losses here; the IRS wants winnings and losses reported separately.
• Total losses — the losing bets you can document.
• Other income — wages and other income before deductions. Winnings are taxed as ordinary income on top of it, so this decides which bracket they land in.
• Other itemized deductions — mortgage interest, state and local tax, charity. Leave 0 if you take the standard deduction.
• State tax rate (optional) — your state's rate on gambling income, and whether your state lets you subtract losses (many do not).

The result shows the federal tax the winnings add and the bracket they reach, the state tax, the total, the effective rate on your winnings, and your after-tax profit (winnings minus losses minus tax). It also explains how your losses counted: whether itemizing beats the standard deduction, and — for 2026 — any phantom income the 90% cap leaves taxable.

Important: this is an estimate of the tax your gambling adds, not a full return. Credits, other deductions and state rules can change the result — check IRS Publication 525 / Form W-2G instructions or a tax professional before filing.

The calculation follows the way Form 1040 treats gambling:

1. Deductible losses = min(Losses × share, Winnings), where share = 100% for 2025 and 90% from 2026 (One Big Beautiful Bill Act).
2. Deduction = the larger of the standard deduction and your itemized total (other itemized + deductible losses). Losses only help when that itemized total beats the standard deduction ($16,100 single / $32,200 joint / $24,150 head of household for 2026; $15,750 / $31,500 / $23,625 for 2025).
3. Federal tax on winnings = tax(other income + winnings − deduction with losses) − tax(other income − deduction without them), using the IRS brackets (10% to 37%) for your filing status and year.
4. State tax = State rate × winnings (or × winnings − losses where your state allows the deduction).
5. After-tax profit = Winnings − Losses − Federal tax − State tax; Effective rate = Total tax ÷ Winnings.
6. Phantom income (2026+, itemizers) = the part of your losses, up to your winnings, that the 90% cap does not let you deduct.

Bracket and standard-deduction figures come from IRS Rev. Proc. 2024-40 (2025) and Rev. Proc. 2025-32 (2026).

Example 1 — Weekend NFL Bettor (2026, single)

• Other income: $60,000; standard deduction
• Winnings over the season: $3,500; losses: $2,800 (net result +$700)
• Losses don't count — not itemizing — so all $3,500 is taxed
• Federal tax: $420 (the winnings stay in the 12% bracket)
• No state income tax
• After-tax profit: $280

The bettor made $700 but pays tax on $3,500 — the most common surprise for recreational bettors who take the standard deduction.

Example 2 — Lucky Parlay Hit (2026, married filing jointly)

• Other income: $120,000
• One parlay pays $10,000 on a $25 ticket (winnings $10,000, losses $25)
• Federal tax: $1,200 (12% bracket — joint brackets are twice as wide)
• After-tax profit: $8,775

A payout this size, at more than 300 times the stake, comes with Form W-2G, and the book may withhold 24% federal tax — more than this couple owes, so the excess comes back as a refund.

Example 3 — Break-Even Year Under the 90% Rule

• 2026, single, other income $80,000, other itemized deductions $18,000
• Winnings $20,000; losses $20,000 (net result $0)
• Deductible losses: 90% → $18,000; phantom income: $2,000
• Federal tax: $440 on a year that made nothing

The same numbers under the 2025 rules owe $0. From 2026 a gambler who breaks even still pays tax on 10% of the winnings, which is why keeping winnings and losses low (and records exact) matters more than before.

Record-Keeping Best Practices

The IRS expects you to keep a gambling diary that includes: the date and type of each wager, the name and address of the gambling establishment, the names of other people present (if applicable), and the amounts won or lost. For online sports betting, your account history and transaction statements serve as your records. Download and save these at the end of each year.

Automatic Withholding

For a sportsbook payout of more than $5,000 that is at least 300 times the stake, the payer is required to withhold 24% federal income tax. This withholding is reported on Form W-2G and can be claimed as a credit on your tax return — just like employer withholding from a paycheck. If your marginal rate is below 24%, you may receive a refund of the over-withheld amount.