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Is it true that you can claim your loosing lottrey tickets on your tax

Topic closed. 12 replies. Last post 9 years ago by bashley572.

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bigato1010's avatar - army

United States
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Posted: February 8, 2008, 4:38 pm - IP Logged

How much can  you cliam ? How does it work ?

    showme3's avatar - Lottery-012.jpg
    Toms River, NJ
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    February 13, 2006
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    Posted: February 8, 2008, 4:48 pm - IP Logged

    How much can  you cliam ? How does it work ?

    Yes it is true, but you can't claim more losses than your winnings.  Go figure....

    Check out the IRS website for more information.  Just do a search undar Gambling winnings.

     

    Don 

    GO NJ DEVILS! STANELY CUP HERE WE COME! Red Devil

      justxploring's avatar - villiarna
      Wandering Aimlessly
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      Posted: February 8, 2008, 4:52 pm - IP Logged

      How much did you win, bigato1010?  I think you can search for this information on LP.

      First of all, you must itemize your earnings in the first place to deduct anything at all.  Many people just take the standard deduction, depending on their income and (to be redundant) the amount of deductions they have.  For example, if I made $25,000 and didn't own a home or have unusually high medical bills, using the 1040EZ form and taking the standard deduction might make more sense.

      Second, you can only deduct up to the amount you won during the year to even consider deducting them. 

      Third, the IRS realizes that anyone can just grab a bunch of scratch-offs out of the trash, so you are supposed to keep a daily/weekly log of your purchases stating where & when you bought the tickets.  However, the chances of being audited by the IRS are very slim UNLESS you raise a red flag.  One flag might be deducting a very disproportionate amount of lottery tickets from a small win.

       

      here is one LP discussion: http://www.lotterypost.com/thread.aspx?tp=153559&q=deducting%2C+tax%2C+tickets&rp=search&get=802298

        bigato1010's avatar - army

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        Posted: February 8, 2008, 5:05 pm - IP Logged

        Thank you justxploring , loosing tckets i was talking about .  Good to know really appreciate your insight. 

          sfilippo's avatar - skull
          Oklahoma
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          Posted: February 8, 2008, 5:58 pm - IP Logged

          Justexploring,

          Thanks from me too. It's good to know that just in case I win something.

          Smiley Steve

            justxploring's avatar - villiarna
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            Posted: February 8, 2008, 6:46 pm - IP Logged

            Thanks, for the thanks!  LOL

            Keep in mind, I am not a tax specialist, so you might want to check the IRS rules, which change regularly.  I only know what I've learned from reading in the past.   The form is W2-G, I believe.  Unfortunately, I've never won enough to file one.

            Frown

              Badger's avatar - adu50016 NorthAmericanBadger.jpg
              Wisconsin
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              Posted: February 8, 2008, 7:03 pm - IP Logged

              Don't forget to check for your own state rules (assuming you have to fill out a state income tax form) also.  They can operate separately.  As I understand it, for instance, here in WI the state used to let us deduct losses up to the amount of winnings (which really makes no sense other than to let them know who is a gambler) but they no longer allow any kind of gambling deduction for lottery.

              If your profession was actually "Professional Gambler" and you listed that on the tax forms, I'm not sure what is deductible.  (remember there are people out there that do it for a living)

              ============

              How can you tell if a politician is lying?

              Answer: His lips are moving.

                justxploring's avatar - villiarna
                Wandering Aimlessly
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                Posted: February 8, 2008, 7:19 pm - IP Logged

                Thanks, Badger.  I would never have thought about the state tax since I live in FL. 

                 

                "If your profession was actually "Professional Gambler" and you listed that on the tax forms, I'm not sure what is deductible.  (remember there are people out there that do it for a living) "

                 

                I'm now wondering if I can call myself a professional blogger. 

                  Coin Toss's avatar - shape barbed.jpg
                  Zeta Reticuli Star System
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                  Posted: February 8, 2008, 7:33 pm - IP Logged

                  Thanks, Badger.  I would never have thought about the state tax since I live in FL. 

                   

                  "If your profession was actually "Professional Gambler" and you listed that on the tax forms, I'm not sure what is deductible.  (remember there are people out there that do it for a living) "

                   

                  I'm now wondering if I can call myself a professional blogger. 

                  Most professional gamblers are poker players and sports bettors. The poker players deduct entry fees, travel expenses, etc... 

                  Good question about professional bloggers! I'm sure there are those who call themselves that.

                  Those who run the lotteries love it when players look for consistency in something that's designed not to have any.

                  Lep

                  There is one and only one 'proven' system, and that is to book the action. No matter the game, let the players pick their own losers.

                    LottoAce's avatar - WWI Flying_Ace.gif
                    N.C.
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                    Posted: February 8, 2008, 7:40 pm - IP Logged

                    I understand about only being able to file deductions equal to or less than your winnings. also keeping logs, records, and reciepts on all transactions is always a neccesity.

                    I at one time was self employed. so my question.

                    are lottery winnings subject to self employment tax?.

                    (this would mean that you pay your half of your social security taxes, (just like you do on the job now) plus the employers half? (which is now paid for you, by the company you work for)

                    or is it just like recieving an ordinary paycheck where a percentage is taken out? 

                    "know your limitations, but excede your expectations"

                      RJOh's avatar - chipmunk
                      mid-Ohio
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                      Posted: February 8, 2008, 7:53 pm - IP Logged

                      Professional gamblers (people earning a living by gambling) can deduct more than people who gamble or play the lottery for entertainment.  Lottery winnings is treated like regular income and regular lottery players can only claim losses up to the amount they claimed as winnings. 

                      States only track and make out a WG-2 forms for winnings of $600 or more so players have to keep their own records of smaller winnings and add them to their yearly income if they wish to pay taxes on them.

                       * you don't need to buy more tickets, just buy a winning ticket * 
                         
                                   Evil Looking       

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                        Posted: February 9, 2008, 2:32 am - IP Logged

                        I understand about only being able to file deductions equal to or less than your winnings. also keeping logs, records, and reciepts on all transactions is always a neccesity.

                        I at one time was self employed. so my question.

                        are lottery winnings subject to self employment tax?.

                        (this would mean that you pay your half of your social security taxes, (just like you do on the job now) plus the employers half? (which is now paid for you, by the company you work for)

                        or is it just like recieving an ordinary paycheck where a percentage is taken out? 

                        Social security / self employment taxes only apply to earned income.  Gambling winnings, interest and dividends, or income from a rental property are generally not earned income. For a professional gambler, winnings are earned income. Some rental income may be considered earned income if renting property amounts to a business, or the owner performs services that would reasonably increase the rental income or reduce expenses.

                          bashley572's avatar - starwars14
                          West Side of Sunny Florida
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                          Posted: February 9, 2008, 4:45 am - IP Logged

                          And in anticipation of the big win each year, I keep ALL my lossing tickets so I have my proof cuz with out proof the government is not going to let you take the deduction. 

                          Money won is twice as good as money earned!