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Online lottery sales not approved by Massachusetts lawmakers

Topic closed. 33 replies. Last post 3 months ago by sam9009.

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Posted: August 2, 2016, 6:50 pm - IP Logged

Yes. Because the state has already taken their cut.

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    Kentucky
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    Posted: August 2, 2016, 7:14 pm - IP Logged

    I thought that prizes up to $600 were not taxable income?

    Prizes over $600 are not issued a W-2G which basically means there is no written record of the win. But by playing online there is a record of all the transactions. Last year I "won" over $600 accumulated on a legal horse racing site, but since they never sent me an statement, I had nothing to give to the IRS.

      LiveInGreenBay's avatar - driver
      Green Bay
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      Posted: August 2, 2016, 7:22 pm - IP Logged

      Prizes over $600 are not issued a W-2G which basically means there is no written record of the win. But by playing online there is a record of all the transactions. Last year I "won" over $600 accumulated on a legal horse racing site, but since they never sent me an statement, I had nothing to give to the IRS.

      I think you mean under 600.  That's true.  The discussion was online lottery.  Say you run a pick 3 ticket ten times and hit the jp.  That's 5 grand.  If you bought retail, you can turn those tickets into various retail lottery stores and collect 5 grand.  But if they were bought online, a record of those wins would be available to the State department of Revenue and the IRS.  Guess what...You owe.

      Never give up.  Banana

        grwurston's avatar - Cute animals_Spider.jpg
        Winning makes me smile.
        bel air maryland
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        Posted: August 2, 2016, 7:23 pm - IP Logged

        Prizes over $600 are not issued a W-2G which basically means there is no written record of the win. But by playing online there is a record of all the transactions. Last year I "won" over $600 accumulated on a legal horse racing site, but since they never sent me an statement, I had nothing to give to the IRS.

        You mean, prizes under $600.

        "You can observe a lot just by watching." Yogi Berra, Hall of Fame baseball player.

        The numbers will tell you what numbers to play. Pay attention to the numbers.

        Don't just think outside the box, crush it.

          LiveInGreenBay's avatar - driver
          Green Bay
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          Posted: August 2, 2016, 7:26 pm - IP Logged

          There is a record and taxes are still owed. When you hand the ticket to the retailer, it gets verified and recorded. If you manage to win that many hits, the IRS will come looking for its cut and you'll see the bad side of a pair of handcuffs. We can't even use a credit card here in NY to buy a ticket,you really think the NY lottery is gonna digitize anything in the near future?

          All you have to do is sign the back of the ticket.  How they going to know who it is?  Hey, my name is John Smith.

          Never give up.  Banana

            Groppo's avatar - cat anm.gif

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            Posted: August 2, 2016, 7:53 pm - IP Logged

            .

            Many good points have been made here, this evening.

            If you are just joining this article, and it's comments, please be sure to read all the comments.
            I have learned a lot from the comments here AND in previous articles and their comments.

            Lessons learned here have already forged certain decisions I'll make from now, on:

            I shall NOT participate in online gaming of any kind, for fear of the smallest prizes accumulating
            within the year and resulting in the IRS obliging me.

            Mr. Groppo

            • Don't chase the numbers you play.
            • Play only numbers you've already played, plus however many random picks.
            • But, ALWAYS the regular numbers you play.  This will make you a winner, not a chaser.
                      (so far, though, I've yet to win any significant lotto prize)
              TheMeatman2005's avatar - lightening
              Brooklyn, NY
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              Posted: August 2, 2016, 11:21 pm - IP Logged

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

              Topic 419 - Gambling Income and Losses

              The following rules apply to casual gamblers. Gambling winnings are fully taxable and you must report them on your tax return. Gambling income includes but is not limited to winnings from lotteries, raffles, horse races, and casinos. It includes cash winnings and the fair market value of prizes, such as cars and trips. For additional information, refer to Publication 525, Taxable and Nontaxable Income, or review How Do I Claim My Gambling Winnings and/or Losses?

              Gambling Winnings

              A payer is required to issue you a Form W-2G (PDF), Certain Gambling Winnings, if you receive certain gambling winnings or if you have any gambling winnings subject to federal income tax withholding. You must report all gambling winnings on your Form 1040(PDF) as "Other Income" (line 21), including winnings that are not subject to withholding. In addition, you may be required to pay an estimated tax on your gambling winnings. For information on withholding on gambling winnings, refer to Publication 505, Tax Withholding and Estimated Tax. If you are considered a nonresident alien of the United States for income tax purposes and you have to file a tax return, you must use Form 1040NR (PDF), U.S. Nonresident Alien Income Tax Return. Refer to Publication 519, U.S. Tax Guide for Aliens, and Publication 901, U.S. Tax Treaties, for more information.

              Gambling Losses

              You may deduct gambling losses only if you itemize deductions. However, the amount of losses you deduct may not be more than the amount of gambling income reported on your return. Claim your gambling losses on Form 1040, Schedule A (PDF) as an "Other Miscellaneous Deduction" (line 28) that is not subject to the 2% limit. A nonresident alien of the United States cannot deduct gambling losses.

              Recordkeeping

              It is important to keep an accurate diary or similar record of your gambling winnings and losses. To deduct your losses, you must be able to provide receipts, tickets, statements, or other records that show the amount of both your winnings and losses. Refer toPublication 529, Miscellaneous Deductions, for more information.

              You are legally obligated to report any and all lottery winnings....even $5, but can deduct the cost of the ticket and any other gambling loses up to and including the winning amount.

              You may not win enough to receive a form W-2G, but you are still required to report the proceeds.

              The Meatman

              “The quickest way to double your money is to fold it in half and put it in your back pocket.” Will Rogers

              Winning happens in a flash, Like A Bolt Of Lightning!  Patriot

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                Simpsonville
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                Posted: August 3, 2016, 7:14 am - IP Logged

                Too bad for the residents of Massachusetts.  Glad KY is one of the few states that allows on-line ticket purchases.

                 

                On a side note, all set for Mass. lotteries.  My Season Tickets for Powerball, Megamillions and MegaBucks Doubler have all arrived and good through 28 AUG 2017.


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                  Posted: August 3, 2016, 8:22 am - IP Logged

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

                  Topic 419 - Gambling Income and Losses

                  The following rules apply to casual gamblers. Gambling winnings are fully taxable and you must report them on your tax return. Gambling income includes but is not limited to winnings from lotteries, raffles, horse races, and casinos. It includes cash winnings and the fair market value of prizes, such as cars and trips. For additional information, refer to Publication 525, Taxable and Nontaxable Income, or review How Do I Claim My Gambling Winnings and/or Losses?

                  Gambling Winnings

                  A payer is required to issue you a Form W-2G (PDF), Certain Gambling Winnings, if you receive certain gambling winnings or if you have any gambling winnings subject to federal income tax withholding. You must report all gambling winnings on your Form 1040(PDF) as "Other Income" (line 21), including winnings that are not subject to withholding. In addition, you may be required to pay an estimated tax on your gambling winnings. For information on withholding on gambling winnings, refer to Publication 505, Tax Withholding and Estimated Tax. If you are considered a nonresident alien of the United States for income tax purposes and you have to file a tax return, you must use Form 1040NR (PDF), U.S. Nonresident Alien Income Tax Return. Refer to Publication 519, U.S. Tax Guide for Aliens, and Publication 901, U.S. Tax Treaties, for more information.

                  Gambling Losses

                  You may deduct gambling losses only if you itemize deductions. However, the amount of losses you deduct may not be more than the amount of gambling income reported on your return. Claim your gambling losses on Form 1040, Schedule A (PDF) as an "Other Miscellaneous Deduction" (line 28) that is not subject to the 2% limit. A nonresident alien of the United States cannot deduct gambling losses.

                  Recordkeeping

                  It is important to keep an accurate diary or similar record of your gambling winnings and losses. To deduct your losses, you must be able to provide receipts, tickets, statements, or other records that show the amount of both your winnings and losses. Refer toPublication 529, Miscellaneous Deductions, for more information.

                  You are legally obligated to report any and all lottery winnings....even $5, but can deduct the cost of the ticket and any other gambling loses up to and including the winning amount.

                  You may not win enough to receive a form W-2G, but you are still required to report the proceeds.

                  why would anyone report lottery winnings under 600.00 to the government both state and federal. you don't have to sign the ticket to cash it (you shouldn't) so how would they know who cashed it.  even if you were foolish enough to sign it they don't have anyone checking all these tickets (under 600.00) to catch you. even if you won 500.00 75 times in a year there is no way they can attached that to you. if you buy a ticket online that's a different animal. don't do it.

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                    Simpsonville
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                    Posted: August 3, 2016, 8:34 am - IP Logged

                    why would anyone report lottery winnings under 600.00 to the government both state and federal. you don't have to sign the ticket to cash it (you shouldn't) so how would they know who cashed it.  even if you were foolish enough to sign it they don't have anyone checking all these tickets (under 600.00) to catch you. even if you won 500.00 75 times in a year there is no way they can attached that to you. if you buy a ticket online that's a different animal. don't do it.

                    Yes,

                    But didn't Governor Patrick institute a state tax in Mass. for winnings over $500???

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                      Kentucky
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                      Posted: August 3, 2016, 11:23 am - IP Logged

                      I think you mean under 600.  That's true.  The discussion was online lottery.  Say you run a pick 3 ticket ten times and hit the jp.  That's 5 grand.  If you bought retail, you can turn those tickets into various retail lottery stores and collect 5 grand.  But if they were bought online, a record of those wins would be available to the State department of Revenue and the IRS.  Guess what...You owe.

                      As somebody pointed out, the IRS defines it as "gambling winnings" so if the prize is $600 like the KY pick-3 pays, the winnings are $599. The KY Lottery agents do not issue a W-2G on $1 pick-3 winning straight ticket. Under your ten $500 winning tickets scenario, no W-2G would not be issued so no winnings are reported to the IRS.

                      The KY lottery offers MM, PB, and its state game Cash Ball Online along with several instant play games some with prizes up to $50,000. Any wager winning over $600 is reported to the IRS, the same as if it was from a lottery retailer. The difference between wagering Online is there is a record of all the wagers, There is no report to the IRS or record of the $5000 paid out by a retailer(s).

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                        Kentucky
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                        Posted: August 3, 2016, 11:47 am - IP Logged

                        why would anyone report lottery winnings under 600.00 to the government both state and federal. you don't have to sign the ticket to cash it (you shouldn't) so how would they know who cashed it.  even if you were foolish enough to sign it they don't have anyone checking all these tickets (under 600.00) to catch you. even if you won 500.00 75 times in a year there is no way they can attached that to you. if you buy a ticket online that's a different animal. don't do it.

                        Good question!

                        All gambling winnings (I suppose it mean free tickets too) must be reported as income on 1040s, but any gambling losses up to the amount of the winnings can be deducted using schedule "A" itemize deductions. How any individual decides how much they won (winning minus losses?) whether or not to report it, is their decision.

                        "there is no way they can attached that to you"

                        IMO, that's between you, your accountant, and the IRS.

                          Kingofearth's avatar - Kinnak
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                          Posted: August 3, 2016, 12:08 pm - IP Logged

                          why would anyone report lottery winnings under 600.00 to the government both state and federal. you don't have to sign the ticket to cash it (you shouldn't) so how would they know who cashed it.  even if you were foolish enough to sign it they don't have anyone checking all these tickets (under 600.00) to catch you. even if you won 500.00 75 times in a year there is no way they can attached that to you. if you buy a ticket online that's a different animal. don't do it.

                          A couple hundred is too small for even the IRS to care BUT if you manage to win thousands and thousand from the small prizes and/or you rely on your new skill as a major part of your income, you better report it or the IRS will come knocking with handcuffs. If you win $500 that many times, MUSL will investigate the fraud going on given it's near impossible for anyone to win that many times, and they'll look at the surveillance cameras and find out who won that much. Between court fees from unpaid taxes, paying the unpaid taxes, and lawyer fees, you'll be in the red just because you didn't file it.

                            LiveInGreenBay's avatar - driver
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                            Posted: August 3, 2016, 12:14 pm - IP Logged

                            A couple hundred is too small for even the IRS to care BUT if you manage to win thousands and thousand from the small prizes and/or you rely on your new skill as a major part of your income, you better report it or the IRS will come knocking with handcuffs. If you win $500 that many times, MUSL will investigate the fraud going on given it's near impossible for anyone to win that many times, and they'll look at the surveillance cameras and find out who won that much. Between court fees from unpaid taxes, paying the unpaid taxes, and lawyer fees, you'll be in the red just because you didn't file it.

                            Answer me this... If someone did win $500.00 a bunch of times over the period of a year or so, how would they know it was one person?  The lottery won't investigate squat.

                            Never give up.  Banana

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                              Kentucky
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                              Posted: August 3, 2016, 12:39 pm - IP Logged

                              A couple hundred is too small for even the IRS to care BUT if you manage to win thousands and thousand from the small prizes and/or you rely on your new skill as a major part of your income, you better report it or the IRS will come knocking with handcuffs. If you win $500 that many times, MUSL will investigate the fraud going on given it's near impossible for anyone to win that many times, and they'll look at the surveillance cameras and find out who won that much. Between court fees from unpaid taxes, paying the unpaid taxes, and lawyer fees, you'll be in the red just because you didn't file it.

                              "If you win $500 that many times, MUSL will investigate the fraud going on given it's near impossible for anyone to win that many times, and they'll look at the surveillance cameras and find out who won that much. "

                              ROFL

                              Apologies for laughing, but some state lotteries pay out $500,000 daily and I seriously doubt they have the time or resources to investigate 365,000 winning tickets year. Now if a state had an average daily sales of $600,000 and paid out $500,000 daily, there might be some type of investigation, but on average, pick-3 payoffs are very close to 50% of the wagers; they expect to pay out half the sales.

                              A couple years ago, the KY Lottery paid out 92% of their pick-3 sales (over $10 million) for one month without any retail sales investigation because their live ball drawings had an extraordinary amount of triples. Oh and BTY, MUSL does not oversee state lottery games, just MM, PB, and the smaller multi-state games (Hotlotto etc).