|Posted: February 23, 2008, 4:56 pm - IP Logged|
Hi, I'm new here and had a question for all of you. Let's say you buy a $20 scratch off and win $40. When claiming the prize winnings on your taxes, would I say I won $40, say I won $20 (difference between winnings and cost of ticket) or say I won $40 but claim a loss of $20.
Any prize less than about $600 (varies slightly by state) can be claimed at any lottery retailer. They do not hold back any taxes when you claim your prize for less than $600. Technically, you're supposed to claim such prizes on your taxes at the end of the year, but I doubt many people do that, because nobody really knows they won anything.
If you do have some significant prizes to claim on your taxes at the end of the year, you can offset whatever amount you spent on tickets (winning or losing). So if you're going to do that, be sure to save your tickets.