Super Bowl.... or Super Bore??

By Chris Bevington, CPA

As the nation prepares for one of the world’s most popular sporting events, one has to wonder if this year’s game can live up to its anticipated hype.  Although we’ve had some decent games in recent memory, too often the Super Bowl becomes the Super “Bore” as one team ends up annihilating the other.  We find ourselves more entertained by the commercials, and less in tune with the score of the game, sometimes as quickly as halftime, if not sooner.  So what can we expect this February 5^th, 2012, when the underdog-New York Giants take on Tom Brady and the New England Patriots in Super Bowl XLVI?

Current odds establish the Patriots as three-point favorites, with the total points scored opening at 53.  Those odds are likely to change as we get closer to game time, but that’s where things set as I write this January 27, 2012.  So can we expect a decent game based on this year’s odds?  I believe we can.

The Patriots will have revenge on their minds, looking to avenge a 17-14 loss to the Giants in Super Bowl XLII; a painful loss that left the Patriots at 18-1, ruining a previously undefeated 2007 season.  The key to a Patriots’ victory will be protecting Tom Brady, and the health of star tight end Rob Gronkowski, who suffered an ankle injury in last week’s victory over the Ravens.  If he can’t go full-speed, it could seriously hinder their offense.

Despite the revenge factor, and the Patriots being the odds on favorite, I see the Giants pulling off a victory in this Super Bowl rematch.  The Patriots will not be able to withstand the pressure of the Giants front four, which will keep Brady uncomfortable in the pocket all day, and force at least one key turnover.  Brady will still make plays, but not enough.  The Giants should be able to establish the run early against a weak Patriot defense, which in turn will open up passing lanes for Eli Manning all afternoon.  The Giants win in a shootout, 38-34.

Since you’re visiting a CPA and Financial Advisor website, you must be wondering what angle I can possibly use to relate the Super Bowl to financial advice.  It’s not too much of a stretch at this point to share a few comments on the taxability of gambling income.

Most gamblers are considered casual or nonprofessional gamblers.  They report their gambling winning on line 21 of Form 1040.  All gambling winnings are subject to income taxes, whether or not the winnings are reported on a W-2G. Substantiated gambling losses are deductible as a miscellaneous deduction on Schedule A, not subject to the 2% of AGI limitations, but are only reportable to the extent of gambling winnings.

Professional gamblers, defined as individuals who pursue gambling full time, with regularity, and as a livelihood rather than as a hobby, report their winnings, losses, and expenses on a Schedule C.  Professional gamblers must demonstrate a profit motive for it to be considered a trade or business, where expenses can be reported on a Schedule C.

Enjoy the game!!