Hi all, apologies in advance for whats probably going to be a long post, but just want to
I am curious as to the legal and tax implications for somebody in my position. I am a UK citizen, living in the US (massachusetts to be precise),on a non immigrant ****. Of course in the UK online gambling on sports, etc is totally legal and tax free. In the UK I used to bet a bit, and also did some 'matched betting' (which for the uninitiated basically involve betting on both outcomes of an event to trigger a free bet promo and lock in a profit). I am thinking about trying to get back into it as in the past it was usually good for a few k worth of profit a year, but unsure as to the legal position, and tax implications of turning a profit in this way.
Generally you are unable to access UK sports bookie's websites from the US, and they definitely would not take a US address or bank information as payment. However, I maintain a bank account and permanent address in the UK and with a VPN can access the sites, deposit and bet.
Now everything i've read online pretty much suggests that online gambling being illegal in the US is a bit of a misconception, and that there is no law against actually placing bets online, and the law is more based around prohibiting businesses/organizations taking bets online in the US.
So question 1.. is that correct? I can legally use a VPN to access UK betting sites, and deposit/place bets/withdraw via my UK bank account?
Question 2 - Taxes - This is the part I am mostly unsure about. I am a foreigner, but for tax purposes am considered a 'tax resident', and therefore am supposed to report my worldwide income. I should also report gambling winnings. Now i don't know for sure, but i think foreign earned income, and gambling income is filed in 2 different places on tax returns. If that is the case, then my income from betting would technically be both.
Therefore, Does that mean I can just report the profit i make betting in the UK, through UK bank accounts, UK address, etc as overseas income?
To confuse me more, I also found the below link which seems to give conflicting information. Saying worldwide income is taxable for US tax resident (which I am), and then it also states: however, nonimmigrant **** holders do not have to pay taxes on earnings made outside of the United States.
Or, do i need to file as other income like most people would with gambling winnings? I have read up on that as well, and it suggests that I would need to calculate the total winnings, and put this as other income. And then total up and itemize the losses and put those as a deduction, while keeping a diary of these wins and losses for in the event of being audited.
With regards to matched betting, every bet essentially wins and loses somewhere. So I assume I would just need to keep a record of where each side of the bet won and lost, and over the course of the year, the win side would work out higher than the loss side, which is the amount i'd then be taxed on. When doing matched betting, the amounts over the course of a year would probably be quite high compared to the actual profit being made. With matched betting, over the course of the year I could be reporting wins and loses of tens of thousands, and yet difference between the 2 (the actual profit) would be relatively low. Not sure if that makes a difference either. I imagine somebody reporting say for example $20-30k of wins, and $15-25k of losses would get a more watchful eye than somebody who just wins a couple of bets and makes $5k even though the actual profit works out the same.
Anyone able to confirm or have an idea of what the situation might be? Happy to report and pay taxes on profit, but want to be sure I'm ok to be doing so, and that if so I would be doing it in the right way. The chances are I imagine quite slim that anyone would even know about the ongoings and incomings in my UK bank account and the bets I place online, but for my own peace of mind it's probably not worth the risk of not declaring it. Thanks in advance for any help.
I am curious as to the legal and tax implications for somebody in my position. I am a UK citizen, living in the US (massachusetts to be precise),on a non immigrant ****. Of course in the UK online gambling on sports, etc is totally legal and tax free. In the UK I used to bet a bit, and also did some 'matched betting' (which for the uninitiated basically involve betting on both outcomes of an event to trigger a free bet promo and lock in a profit). I am thinking about trying to get back into it as in the past it was usually good for a few k worth of profit a year, but unsure as to the legal position, and tax implications of turning a profit in this way.
Generally you are unable to access UK sports bookie's websites from the US, and they definitely would not take a US address or bank information as payment. However, I maintain a bank account and permanent address in the UK and with a VPN can access the sites, deposit and bet.
Now everything i've read online pretty much suggests that online gambling being illegal in the US is a bit of a misconception, and that there is no law against actually placing bets online, and the law is more based around prohibiting businesses/organizations taking bets online in the US.
So question 1.. is that correct? I can legally use a VPN to access UK betting sites, and deposit/place bets/withdraw via my UK bank account?
Question 2 - Taxes - This is the part I am mostly unsure about. I am a foreigner, but for tax purposes am considered a 'tax resident', and therefore am supposed to report my worldwide income. I should also report gambling winnings. Now i don't know for sure, but i think foreign earned income, and gambling income is filed in 2 different places on tax returns. If that is the case, then my income from betting would technically be both.
Therefore, Does that mean I can just report the profit i make betting in the UK, through UK bank accounts, UK address, etc as overseas income?
To confuse me more, I also found the below link which seems to give conflicting information. Saying worldwide income is taxable for US tax resident (which I am), and then it also states: however, nonimmigrant **** holders do not have to pay taxes on earnings made outside of the United States.
Or, do i need to file as other income like most people would with gambling winnings? I have read up on that as well, and it suggests that I would need to calculate the total winnings, and put this as other income. And then total up and itemize the losses and put those as a deduction, while keeping a diary of these wins and losses for in the event of being audited.
With regards to matched betting, every bet essentially wins and loses somewhere. So I assume I would just need to keep a record of where each side of the bet won and lost, and over the course of the year, the win side would work out higher than the loss side, which is the amount i'd then be taxed on. When doing matched betting, the amounts over the course of a year would probably be quite high compared to the actual profit being made. With matched betting, over the course of the year I could be reporting wins and loses of tens of thousands, and yet difference between the 2 (the actual profit) would be relatively low. Not sure if that makes a difference either. I imagine somebody reporting say for example $20-30k of wins, and $15-25k of losses would get a more watchful eye than somebody who just wins a couple of bets and makes $5k even though the actual profit works out the same.
Anyone able to confirm or have an idea of what the situation might be? Happy to report and pay taxes on profit, but want to be sure I'm ok to be doing so, and that if so I would be doing it in the right way. The chances are I imagine quite slim that anyone would even know about the ongoings and incomings in my UK bank account and the bets I place online, but for my own peace of mind it's probably not worth the risk of not declaring it. Thanks in advance for any help.
