witholding taxes on winnings
 

I was lucky enough to have (2) dollar tickets on the derby winning exacta does it make any tax difference if I cash them both in at the same time? How much will they take out in taxes each ticket is worth just over a thousand dollars. Someone told me they take out 25% is that of the amount over $600 or is it of the entire amount. Hate paying taxes when I finally have a winner.

I think the auto takeout starts at $5k. you'll still get a 1099-G but won't have to do anything until you fill out your taxes next year.

person ahead of me in line at Arlington hit a $2 exacta and didn't get any taken out then... only the 1099-G

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Mine wasn't a signer, only a future ticket that for some reason or other wasn't in the system at the time, so had to see the supervisor for my 9-5 field bet from pool 1.

As stated the w/h kicks in at $5.K you should not have any on the exacta. Congrats on the hit!

Congrats. They won't take any out. If you are worried about future tax liability some people have friends sign for them.

Some states, if you cash them together, will combine them and if they are over 5k, you get nailed. IL is one of those states.

last year I hit a P4 for $7, all $1 tickets, that paid $1200 per $1. I cashed four the first day, and the next day I cashed the next three.

they are suppose to ask if you have identical tickets to combine, same amt,bet , race etc.. then they will withhold if over 5k, now if you cash on seperate days you can get out of taxes up front but they will catch it when you send copies of 1099 along with return, they probably won't do anything since you did declare , but bad idea on your part,they might flag you and watch your gambling winnings close, iv' been thru it. and all irs withholdings is handled this way state laws have nothing to do with it.

Cash them at different times....and you did not hear this from me but dont claim the income on your tax returns, how would they track it to you?

hey hey don't tell him that. They record o copy of your DL and #ss no. you cannot cash without these you will get him in trouble for not declaring gambling winnings, a federal offense duh!!! the track sends copies to irs and you had better send copies to match on your return.

GREAT ADVICE!!!

Be careful if you bet at a Racino, they are trying to rid the similcast and horse parlors of stoopers,and signers to get them away from the casino patrons, which most racinos care less about racing anyway. Wheeling Downs , Tri-state both in WV had some stings and the regulars who made a living doing this got barred for life. also guys who walk around checking slot machines for vouchers not cashed out. You don't want to get caught using a signer unless you know him. they know who these guys are, also i never use any players club card at any racino not worth the points for anyonr(irs) knowing how much you bet and win(excluding) signers which you can't hide.

^ Unable to detect sarcasm

my miss, i'm IQ challenged

I'm pretty sure everyone who bets much knows about the guys who make a living signing for people. I would never ask someone like that to cash a ticket for me, they might keep walking! The advice about the players card is spot-on, that is watched more than a grocery club card.

If he had to sign, I was thinking just straight cashes

If you have to sign then yes, you are screwed tax wise and will have to pay it one time or another.

If you save your losing tickets and you can show that despite hitting the exacta that you still lost money gambling this year, then you will have no tax liability. On your tax return, you will need to show that you won the money on the exacta, but along with that information you will need to show that you had losses higher than that amount to offest the win. Then you will not be required to pay taxes on the winnings.

Rupert, this is true only if you itemize deductions (or if you file Sch. C as a professional gambler). If you take the standard deduction, you are screwed.

http://www.irs.gov/taxtopics/tc419.html

--Dunbar

And people wonder why we are subject to withholding on tickets > $5K.

Yes, that is true. But why wouldn't a person itemize deductions? If a person has net gambling losses for the year but he happened to hit a Pick 4 for $4,000, why wouldn't that persom itemize deductions? He would be a fool not to, unless he likes to pay taxes that he doesn't owe.

Why would you have to list yourself as a professional gambler? I was unaware that you had to list an occupation to be able to offset your capital gains from gambling. I thought you were pretty safe keeping your losing tickets and/or your logs from ADW's to document losses for evidence if your audited.

Let's say his itemized deductions (before gambling losses) are 5K less than the standard deduction. He gains nothing by itemizing. He gives up 5K in deductions in order to gain a 4K deduction.

Let's say his itemized deductions (before gambling losses) are 1K less than the standard deduction. Then he gains by itemizing, but the net effect is that he is paying tax on 1K of his winnings. He can write off 4k of losses, but he's already 1K behind by giving up the standard deduction.

--Dunbar