TurboTax on sports betting: You can't subtract the cost of gambling from your winnings (!)
This is an update to a previous post/question I'd asked this page about whether U.S. gamblers (especially sports bettors) are paying taxes on both the wager AND the profit of their bet. TurboTax today on their Instagram says YES, you are paying taxes on both the wager AND the profit (contrary to what I've seen on tax forums on Reddit). Here's their full response:
"You can't subtract the cost of gambling from your winnings. For example, if you win $620 from a horse race but it costs you $20 to bet, your taxable winnings are $620, not $600 after subtracting your $20 wager. You are not permitted to "net" your winnings and losses. So, in your example, when you bid $100 but win $50, the $150 is your taxable amount, because when you are bidding, you are forfeiting that amount in hopes of winning."
This is going to be a huge shock for many people, given the current state of sports betting/gambling in the U.S. and how widespread it is.