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paying taxes on a $1,000 scratch-off

Topic closed. 31 replies. Last post 2 years ago by billionaire2bee.

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New Member
Pittsburgh, PA
United States
Member #138200
January 21, 2013
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Posted: January 21, 2013, 7:36 pm - IP Logged

I have been obsessively buying scratch-offs here in Pennsylvania for about the past year-and-a-half.  I was lucky enough to hit $1,000 on a $3 Wild Number Bingo.  A local grocery chain store cashed the ticket and gave me the cash.  I was sooooo happy.  Put about $800 in my barely-existing checking account and gave a few bucks to my grandkids and daughter.  Now......... please don't call me naive, but I thought if you saved your non-winning tickets (got a few WalMart bags full) that you could use these at TAX TIME to prove that you spent more than the tax liability.  I called H&R block today to see how that works.  It doesn't!!!  Apparently, you have to itemize and use a longer tax form.  Trouble is, I have nothing else to itemize, just student loan interest.  The standard deduction is $5,950 for an individual already.  So, does this mean that only wealthier people playing the scratch-offs, who itemize already, get this option?  I only make $24,000 a year and play the scratch-offs (like everyone else) in the hopes of making it less stressful pay-to-pay.  I am struggling pay-to-pay, no health insurance from my employer, and would love to go on even a day-vacation this year.  Does anyone have any input about what they did at tax time?  Of note, if it would have been a real large winner, yes, have the lottery take the taxes out right away, but come on, this was $1,000, and it didn't go very far.

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    Upstate NY
    United States
    Member #136091
    December 3, 2012
    243 Posts
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    Posted: January 21, 2013, 7:42 pm - IP Logged

    I have been obsessively buying scratch-offs here in Pennsylvania for about the past year-and-a-half.  I was lucky enough to hit $1,000 on a $3 Wild Number Bingo.  A local grocery chain store cashed the ticket and gave me the cash.  I was sooooo happy.  Put about $800 in my barely-existing checking account and gave a few bucks to my grandkids and daughter.  Now......... please don't call me naive, but I thought if you saved your non-winning tickets (got a few WalMart bags full) that you could use these at TAX TIME to prove that you spent more than the tax liability.  I called H&R block today to see how that works.  It doesn't!!!  Apparently, you have to itemize and use a longer tax form.  Trouble is, I have nothing else to itemize, just student loan interest.  The standard deduction is $5,950 for an individual already.  So, does this mean that only wealthier people playing the scratch-offs, who itemize already, get this option?  I only make $24,000 a year and play the scratch-offs (like everyone else) in the hopes of making it less stressful pay-to-pay.  I am struggling pay-to-pay, no health insurance from my employer, and would love to go on even a day-vacation this year.  Does anyone have any input about what they did at tax time?  Of note, if it would have been a real large winner, yes, have the lottery take the taxes out right away, but come on, this was $1,000, and it didn't go very far.

    Cant really help u with the whole tax question but just wanted to make u aware i filed my taxes on friday and was chraged 140$ for not having health insurance and it comes out of your state tax refund....glad to hear u won 1000 though

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      Pittsburgh, PA
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      January 21, 2013
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      Posted: January 21, 2013, 7:59 pm - IP Logged

      Say what?  Is this the new ObamaCare thing?  You said it came out of  your "state" tax refund.  I have only ever received federal tax refunds.  My state tax has always worked out on penny-to-penny.  I wonder who gets your $140.  Sure helps you in obtaining "affordable" health care, huh?  Sorry to get off on a little tangent here.  I have never been on a forum before, and I don't want to break any rules by talking about taxes and health care when this site is about lottery concerns.  Anyway, the scratch-off tickets have been consuming me.  It just come down to being at the right place at the right time, huh?

        maringoman's avatar - kobold
        Massachusetts
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        Member #37433
        April 14, 2006
        2024 Posts
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        Posted: January 21, 2013, 8:05 pm - IP Logged

        First of all, congratulations! I have a quetion though. I thought any gambling winnings over $600 are taxable, aren't they? I am not sure if this tax is at Federal level or state level. I know PA has no state income taxes on lotterySulk Off

        It's a futile effort.

          onlymoney's avatar - stargate pyramid.jpg

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          June 2, 2012
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          Posted: January 21, 2013, 8:25 pm - IP Logged

          First of all, congratulations! I have a quetion though. I thought any gambling winnings over $600 are taxable, aren't they? I am not sure if this tax is at Federal level or state level. I know PA has no state income taxes on lotterySulk Off

          Any amount of wins are taxable. The 600 is just a cut-off because anything less is not worth it for the IRS to pursue.

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            New Member
            Pittsburgh, PA
            United States
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            January 21, 2013
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            Posted: January 21, 2013, 8:28 pm - IP Logged

            Thank you!  Yeah, it is $600 and over and is on the Federal level.  In Pennsylvania, our lottery benefits its senior citizens.  There is a bill introduced to privatize the PA lottery and, I believe, it is just a matter of a few days whether it will go into effect, no less to a British company.  A bit scary.  We'll see how odds change on the scratch-offs if it is privatized.  Will we be benefiting the Queen?

              rdgrnr's avatar - walt
              -Ridge Runner- Oracle of the Appalachians
              Way back up in them dadgum hills, son!
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              Posted: January 21, 2013, 8:40 pm - IP Logged

              Thank you!  Yeah, it is $600 and over and is on the Federal level.  In Pennsylvania, our lottery benefits its senior citizens.  There is a bill introduced to privatize the PA lottery and, I believe, it is just a matter of a few days whether it will go into effect, no less to a British company.  A bit scary.  We'll see how odds change on the scratch-offs if it is privatized.  Will we be benefiting the Queen?

              I heard a rumor that when the Englishmen take over the lottery, all the smaller wins will be paid in scones.

              I don't know if you've ever had a scone but if you can imagine a muffin made out of sand, kitty litter, bird seed and talcum powder, you get the idea.

              Englishmen love 'em.

              Hell, they fight over 'em.

              "Git ya bloody 'ands off me scone, ya bloody wanker!"

                maringoman's avatar - kobold
                Massachusetts
                United States
                Member #37433
                April 14, 2006
                2024 Posts
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                Posted: January 21, 2013, 9:06 pm - IP Logged

                I heard a rumor that when the Englishmen take over the lottery, all the smaller wins will be paid in scones.

                I don't know if you've ever had a scone but if you can imagine a muffin made out of sand, kitty litter, bird seed and talcum powder, you get the idea.

                Englishmen love 'em.

                Hell, they fight over 'em.

                "Git ya bloody 'ands off me scone, ya bloody wanker!"

                bwahahaha put that bottle down and call a minister lol

                It's a futile effort.

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                  Tyler Texas
                  United States
                  Member #130929
                  July 28, 2012
                  78 Posts
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                  Posted: January 21, 2013, 9:12 pm - IP Logged

                  I have been obsessively buying scratch-offs here in Pennsylvania for about the past year-and-a-half.  I was lucky enough to hit $1,000 on a $3 Wild Number Bingo.  A local grocery chain store cashed the ticket and gave me the cash.  I was sooooo happy.  Put about $800 in my barely-existing checking account and gave a few bucks to my grandkids and daughter.  Now......... please don't call me naive, but I thought if you saved your non-winning tickets (got a few WalMart bags full) that you could use these at TAX TIME to prove that you spent more than the tax liability.  I called H&R block today to see how that works.  It doesn't!!!  Apparently, you have to itemize and use a longer tax form.  Trouble is, I have nothing else to itemize, just student loan interest.  The standard deduction is $5,950 for an individual already.  So, does this mean that only wealthier people playing the scratch-offs, who itemize already, get this option?  I only make $24,000 a year and play the scratch-offs (like everyone else) in the hopes of making it less stressful pay-to-pay.  I am struggling pay-to-pay, no health insurance from my employer, and would love to go on even a day-vacation this year.  Does anyone have any input about what they did at tax time?  Of note, if it would have been a real large winner, yes, have the lottery take the taxes out right away, but come on, this was $1,000, and it didn't go very far.

                   I am far from a tax professional but I believe you are right that you have to itemize to benefit from a gambling loss/breakeven. I have won(taxable amounts over $600) a few thousand at casinos and a few thousand playing lotto most years.Did not go to any casinos this year. I fill out my own taxes and have never been audited so not sure if what I do will pass  an IRS audir or not. I simply show an exact $loss as I had in $wins and keep losing tickets/ATM receipts/ticket purchase receipts to prove I spend a small fortune on gambling and I only win a few thousand. My understanding is the IRS pretty much understands most gamblers lose way more than they win and don't pay much attention unless you win really big.Unfortunately I no longer have a home etc thanks to a divorce so I do not have much to itemize either and I do have to use a IRS long form because of the wins. I think its the 1040 or maybe 1040A. Need to get my past years taxes out to refresh my memory because its about that time again.

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                    New Member
                    Pittsburgh, PA
                    United States
                    Member #138200
                    January 21, 2013
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                    Posted: January 21, 2013, 9:25 pm - IP Logged

                    As we say here in Pittsburgh, "did cha know that if it ain't broke youns shouldna fix it". Iz ascared youns wil sperl the whole thin' ".

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                      Upstate NY
                      United States
                      Member #136091
                      December 3, 2012
                      243 Posts
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                      Posted: January 21, 2013, 9:41 pm - IP Logged

                      Say what?  Is this the new ObamaCare thing?  You said it came out of  your "state" tax refund.  I have only ever received federal tax refunds.  My state tax has always worked out on penny-to-penny.  I wonder who gets your $140.  Sure helps you in obtaining "affordable" health care, huh?  Sorry to get off on a little tangent here.  I have never been on a forum before, and I don't want to break any rules by talking about taxes and health care when this site is about lottery concerns.  Anyway, the scratch-off tickets have been consuming me.  It just come down to being at the right place at the right time, huh?

                      Yes this is the new obama care law and if u come out even in state taxes u will end up owing 140 to the government if u dont have insurance when u file your taxes....it goes up to 500$ next year with no insurance

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                        Marquette, MI
                        United States
                        Member #20541
                        August 20, 2005
                        484 Posts
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                        Posted: January 21, 2013, 11:09 pm - IP Logged

                        The new tax laws have changed what I play for.

                        Your taxes get screwed up at $200,000 or $250,000 and then again around $300,000 and again at around $400,000 or $450,000. (forget the alternative minimum tax)

                        That is why I wont play any games this year that payout less than $2,000,000. I just don't want to deal with the hassles of finally winning something decent and then  getting screwed by the new tax laws.  If it is $2,000,000 or more then I will deal with all the new hassles.

                        If you win a certain amount...what? 200k,250k...you have to start paying an extra 3.8% ObamaCare tax on any interest you get on your bank account and if you have any capital gains or stock dividends you have to pay the 3.8% to ObamaCare also.

                        Thus winning less than 2 Mil is more of a hassle nowadays than it was last year.

                        I stopped playing all the Michigan instants because of the taxes and I also no longer buy the Megaplier. I still will get powerplay though.  If Michigan had cash for life scratchers that paid $180,000 a year I would buy those but they don't exist.  I also stopped playing the 4 digit, Fantasy five if the advertised jackpot is over $180,000 and Keno and Club Keno(still will get club keno if jack is a decent amount).

                        Basically I primarily play Powerball with Powerplay and Megamillion without megaplier now because if I win those I can pay somebody else to worry about taxes. On occasion I will do Fantasy 5 and CKeno with the Jack (but only at levels that don't start screwing taxes up).

                          weshar75's avatar - Lottery-042.jpg
                          Mcminnville, Oregon
                          United States
                          Member #3013
                          December 13, 2003
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                          Posted: January 22, 2013, 12:31 am - IP Logged

                          The new tax laws have changed what I play for.

                          Your taxes get screwed up at $200,000 or $250,000 and then again around $300,000 and again at around $400,000 or $450,000. (forget the alternative minimum tax)

                          That is why I wont play any games this year that payout less than $2,000,000. I just don't want to deal with the hassles of finally winning something decent and then  getting screwed by the new tax laws.  If it is $2,000,000 or more then I will deal with all the new hassles.

                          If you win a certain amount...what? 200k,250k...you have to start paying an extra 3.8% ObamaCare tax on any interest you get on your bank account and if you have any capital gains or stock dividends you have to pay the 3.8% to ObamaCare also.

                          Thus winning less than 2 Mil is more of a hassle nowadays than it was last year.

                          I stopped playing all the Michigan instants because of the taxes and I also no longer buy the Megaplier. I still will get powerplay though.  If Michigan had cash for life scratchers that paid $180,000 a year I would buy those but they don't exist.  I also stopped playing the 4 digit, Fantasy five if the advertised jackpot is over $180,000 and Keno and Club Keno(still will get club keno if jack is a decent amount).

                          Basically I primarily play Powerball with Powerplay and Megamillion without megaplier now because if I win those I can pay somebody else to worry about taxes. On occasion I will do Fantasy 5 and CKeno with the Jack (but only at levels that don't start screwing taxes up).

                          I agree with you THINK on playing only my state lottery megabucks because it is at $9.2 million and mega millions and powerball.  I like to win the big money not small prizes.  Good luck to you on your tickets.-weshar75

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                            Marquette, MI
                            United States
                            Member #20541
                            August 20, 2005
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                            Posted: January 22, 2013, 12:31 am - IP Logged

                            Here is a link with more current information-

                            http://beaconhill.patch.com/articles/new-2013-tax-rates-and-standard-deductions-b561e583

                            Looks like I missed a phase out at $150k.

                            Anyway, they got ya coming and going this year 7 days till sunday.

                            2012 was a lot easier.

                            Course once most players realize what is going on, 2013 could be much cheaper cause they wont play as much.

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                              Marquette, MI
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                              Posted: January 22, 2013, 12:37 am - IP Logged

                              I agree with you THINK on playing only my state lottery megabucks because it is at $9.2 million and mega millions and powerball.  I like to win the big money not small prizes.  Good luck to you on your tickets.-weshar75

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                              Good luck to you too.

                              Ive been playing too long and losing too much.

                              We cant be the only ones that either play for a decent annuity amount or big cash payout.

                              I figure the approximate after tax lump sum payout now to figure out which games to go for.  Forget what they advertise the JP to be.