H&R Block: your source for some of the best, most original music about tax refunds.
No? That doesn’t sound quite right?
It actually is right. We teamed up with 10 talented YouTube personalities to create a new campaign called Billion Back Records. From now through April 15, our talent will release original songs and music videos all about getting your tax refund. Each song is completely unique, ranging from rap to country.
The participating artists are:
The first song and video just went live today! Watch Clara Chung’s video “Things Untold.”
Why are we making a big deal about Billion Back Records? You probably know that we’ve been on a mission all year to help America get its “Billion Back.” We want to extend that message in a useful and fun way. And, we thought it would be nice to provide some new tunes for your Tax Survival Kit.
Ed note: Sure, your annual March Madness office pool is a lot of fun, but what does it mean for your taxes – that’s right, taxes – come April? Here are some important things to keep in mind before filling out your bracket.
“Selection Sunday” for the 2014 Men’s NCAA Basketball Tournament is upon us. This annual tournament is one of the top wagered sporting events in the country. According to the FBI, approximately $2.5 billion is illegally wagered on March Madness each year.
Is participating in an NCAA bracket pool for money illegal? Possibly. A pool for money could violate a host of federal and state laws, although participants are rarely prosecuted.
Whether or not legal, there are tax implications from winning money or prizes in an NCAA pool.
Under the Internal Revenue Code, all gambling winnings or prizes of U.S. residents are taxable.
Whether gambling winnings are $5 or $500,000, all amounts are taxable. It is inaccurate to state that gambling winnings or prizes only reported on informational returns (such as a Form W-2G or Form 1099-MISC) are taxable. And whether the winnings are from a legal sports book in a Las Vegas casino or a legally murky office pool, all of the winnings are taxable.
The Internal Revenue Service requires taxpayers to maintain an accurate diary of all gambling winnings and losses.
If insufficiently documented, gambling losses may be disallowed on examination, resulting in additional tax, interest, and penalties.
IRS Publication 529 states a taxpayer must keep an accurate diary or other similar record of all losses and winnings. The diary should contain:
- The date and type of the specific wager or wagering activity.
- The name and address or location of the gambling establishment.
- The names of other persons present at the gambling establishment.
- The amount(s) won or lost.
In general, gambling winnings are reported as “other income” on Form 1040, and gambling losses are deductible up to the extent of winnings as an itemized deduction on Schedule A.
A taxpayer must separately record each gambling winning “session” and gambling losing “session,” and report the corresponding totals. A taxpayer cannot simply net all gambling winnings and losses from the year and then report that single amount.
Some states with an income tax do not allow gambling losses as an itemized deduction at all.
These “bad states” for gamblers include: Connecticut, Illinois, Indiana, Massachusetts, Michigan, Ohio, Rhode Island, West Virginia, and Wisconsin; with Kansas joining this list for 2014 and beyond. In these states, a taxpayer could pay state income tax on “phantom” income.
Suppose for the year I have $250,000 gambling winnings and $250,000 gambling losses in Connecticut. I can deduct $250,000 of gambling losses as an itemized deduction on Schedule A of Form 1040. On my Connecticut income tax return, however, I cannot take the deduction. I must report and pay tax on all $250,000 of gambling winnings, even though I broke even from gambling for the year.
Changing it Up
Traditionally, I’ve entered NCAA bracket pools—for play money only, of course. This year I’m contemplating a bidding pool. Each team is auctioned for play money, and the person with the championship team wins. I’d probably go for play money broke with my alma mater, the University of Michigan. Go Blue!
We continue our series on the Affordable Care Act and how it affects you. See all of our Health Care posts for more information.
Yes. Under IRS rules, couples married in states that recognize same-sex marriage are considered married for federal tax purposes and will use a married filing status when filing federal tax returns. To be eligible for the advance tax credit, you must file a joint federal return with your spouse. Married individuals filing separate federal returns are not eligible for the credit.
When you apply for the credit, your income will be combined with your spouse’s income to determine household income. This may make it more difficult to qualify for the credit. Also, if you have employer provided health coverage that is not available to your spouse, the rules say your spouse won’t be able to get the credit. You can get help determining your eligibility for the credit and shopping for Marketplace plans at helpth.com.
Ed note: March is Women’s History Month, and we thought it would be great to celebrate the women of our personal histories – our mothers. Yoly Mason specifically looks at the role of mothers in Hispanic culture and, with the help of friends, shares great financial wisdom passed down from moms. Leer en español. In my […]
In a lot of ways, the tax professionals at H&R Block are just like you and me. They have families, a commute to work and lots of meetings. You can find these tax pros everywhere from Maine to Arizona, Canada to Australia. They might go into work at 7 a.m. or stay until 9 p.m. […]
Ed note: H&R Block has been on a mission all year to get America its “Billion Back.” This is because in a 2013 study we found that one in five people who do their own taxes had missed out on money – on average more than $450 per person. So we thought it would be […]
Ed note: There’s nothing like $1,000 tip for a pizza delivery to the world’s biggest stars. Edgar might have had the experience of a lifetime, but he’s also got a nice little chunk of income to account for on next year’s tax returns. Contributor Trent Hamm gives a few tips for those of us who […]
Ed note: If a huge storm is coming, we flock to the store for bread, milk, batteries and more. When finals roll around, every college student loves to stock up on their favorite snacks, supplies and sleep-inhibiting beverages. It’s time we started treating tax time the same way and prep up the essentials. Whether you […]
The IRS issued new numbers last week that show it is hard at work processing millions of returns. We encourage you to check out this infographic that shows how to alter your W-4 – it was one of the most-discussed things on our Facebook page this week.
Ed note: There’s a lot to understand about the new Affordable Care Act, but the issue that has many people very confused is the penalty. The Tax Institute’s lead tax research analyst Lindsey Buchholz explains when and how the penalty could affect you. Leer en español. If you are required to have minimum essential health care […]