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Can I get some help with online lottery tax info

Topic closed. 74 replies. Last post 7 years ago by tiggs95.

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Posted: October 22, 2009, 8:15 am - IP Logged

KY Floyd..Yup you got me pegged..So I called the IRS and told them I wanted to report that I hit 50.00 on the cash 3 and they told me to stop bothering them with such crap..Now what do you suggest?..Give it back?..If the IRS says you don't have to file a certain amout on your tax I won't..Maybe I'll call tax cheat Tim Geitner and Charley Rangel and ask them what I should do..They would probably tell me listen to the expert's on the lottery post..Yeah expert's...

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    Kentucky
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    Posted: October 22, 2009, 10:23 am - IP Logged

    IRS Form 1040 Line 21 Other Income

    One of the things to be reported on this line is:

    "Gambling winnings, including lotteries, raffles,
    a lump-sum payment from the sale of a right to receive
    future lottery payments, etc."

    There is no mention of a dollar amount.  So, legally,
    you are required to report all of your gambling winnings.

    The problem here is you don't understand what "casual gambler" and "gambling winnings" means. We are required to report all our income including "gambling winnings" for the taxable year and the definition of a taxable year is between January 1 and December 31. I can't find where it says to report that free ticket I cashed on August 17, February 2, July 10, or any other day of the year. With over 2 months to go in the taxable year 2009, it's impossible for anyone to now accurately report "gambling winnings" and losses. Should the LP members that expect to win a PB or MM jackpot this year estimate and report their future "gambling winnings" to the IRS and pay those taxes quarterly?

    I suppose we could have the clerks give us a recite signed and dated for every $1 wager we make, but if that idea catches on, the lottery lines when the Powerball or Mega Millions jackpots are over $200 million will be over a mile long. I believe "gambling winnings" means winning more than I wagered in a taxable year so I don't keep track of all my small wins, add them together, report them on line 21, and keep track of all my losses and deduct them on schedule A. Casinos offer player cards that will track your slot play and they will provide you with a print-out, but that isn't accurate because sometimes players forget to use their cards or the card isn't inserted correctly and that play is not reported. I can't find where "gambling winnings" means accumulative winnings and we must report each and everyone of them.

    Every state lottery will report a profit for the taxable year 2009 so with the exception of players signing W2-Gs that are reported to the IRS, there can't be that many players with "gambling winnings" for the taxable year. I'm guessing the people that believe all "gambling winnings" are accumulative and must be reported also report that penny they found in the Wal Mart parking lot.

    A casual gambler makes hundreds if not thousands of wagers in a taxable year and you're making it sound like they must record each wager and the results. I've been to many casinos and never saw anyone with a note pad recording every nickel they put into a slot machine and ever table game along with the results. Now if Tiggs only made one bet for the year, three $1 pick-4 boxes and won $400 on each ticket, they could report $1197 as "gambling winnings" on their 1040 even though there is absolutely no record of them making the bet or collecting any winnings. But Tiggs is probably a "casual gambler" and probably made many losing and small winning bets before and after. If there is no W2-G reported to the IRS and if Tiggs says they have no "gambling winnings" for the taxable year 2009, I believe them and the IRS does too.

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      Georgia
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      Posted: October 22, 2009, 10:26 am - IP Logged

      I'm pretty sure that most people undertand exactly what you're saying, but in case anybody is unclear, I'll spell it out.  You undertstand the legal requirements, but you're a thief who cheats on his taxes because the absence of a paper trail makes you think you can get away with it. Is that about right?

      When the government starts earning their money rather than legislating the forcing of paying it...

       

       

      We work hard to win the money and are entitled to it.

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        Kentucky
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        Posted: October 22, 2009, 10:31 am - IP Logged

        KY Floyd..Yup you got me pegged..So I called the IRS and told them I wanted to report that I hit 50.00 on the cash 3 and they told me to stop bothering them with such crap..Now what do you suggest?..Give it back?..If the IRS says you don't have to file a certain amout on your tax I won't..Maybe I'll call tax cheat Tim Geitner and Charley Rangel and ask them what I should do..They would probably tell me listen to the expert's on the lottery post..Yeah expert's...

        It just occurred to me I forgot to report that free ticket I won in 1997; do you think they will send us to a federal prison?

        Smash

          tiggs95's avatar - Lottery-036.jpg

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          Posted: October 22, 2009, 10:38 am - IP Logged

          I called the tax lady who is in business doing tax returns and told her she's been doing my tax returns for the past 15 years and that people on the internet have called me a tax cheat and thief cause I cheat on my taxes..She said "THE INTERNET"??..Thier is your problam stay off the internet...

           

          Stack47 you are going to lose no matter what you say..I wish you luck but these experst on here are always right..ask them..If you say the sky is blue they will somehow find it to be red and tell you why..Good luck..

            truecritic's avatar - PirateTreasure
            Michigan
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            Posted: October 22, 2009, 1:07 pm - IP Logged

            The problem here is you don't understand what "casual gambler" and "gambling winnings" means. We are required to report all our income including "gambling winnings" for the taxable year and the definition of a taxable year is between January 1 and December 31. I can't find where it says to report that free ticket I cashed on August 17, February 2, July 10, or any other day of the year. With over 2 months to go in the taxable year 2009, it's impossible for anyone to now accurately report "gambling winnings" and losses. Should the LP members that expect to win a PB or MM jackpot this year estimate and report their future "gambling winnings" to the IRS and pay those taxes quarterly?

            I suppose we could have the clerks give us a recite signed and dated for every $1 wager we make, but if that idea catches on, the lottery lines when the Powerball or Mega Millions jackpots are over $200 million will be over a mile long. I believe "gambling winnings" means winning more than I wagered in a taxable year so I don't keep track of all my small wins, add them together, report them on line 21, and keep track of all my losses and deduct them on schedule A. Casinos offer player cards that will track your slot play and they will provide you with a print-out, but that isn't accurate because sometimes players forget to use their cards or the card isn't inserted correctly and that play is not reported. I can't find where "gambling winnings" means accumulative winnings and we must report each and everyone of them.

            Every state lottery will report a profit for the taxable year 2009 so with the exception of players signing W2-Gs that are reported to the IRS, there can't be that many players with "gambling winnings" for the taxable year. I'm guessing the people that believe all "gambling winnings" are accumulative and must be reported also report that penny they found in the Wal Mart parking lot.

            A casual gambler makes hundreds if not thousands of wagers in a taxable year and you're making it sound like they must record each wager and the results. I've been to many casinos and never saw anyone with a note pad recording every nickel they put into a slot machine and ever table game along with the results. Now if Tiggs only made one bet for the year, three $1 pick-4 boxes and won $400 on each ticket, they could report $1197 as "gambling winnings" on their 1040 even though there is absolutely no record of them making the bet or collecting any winnings. But Tiggs is probably a "casual gambler" and probably made many losing and small winning bets before and after. If there is no W2-G reported to the IRS and if Tiggs says they have no "gambling winnings" for the taxable year 2009, I believe them and the IRS does too.

            Anyone that thinks I am a tax expert is mistaken - but I do take time to read rules that apply to me.

            I posted three articles.   The article I posted about Gambling Sessions was specifically for you, Stack.  In the first 2 paragraphs is how you calculate gambling.  Hint: It's NOT the way you posted above.

            http://www.lotterypost.com/thread/201998/1437525

            You can go on doing what you are doing - doesn't bother me in the least, as long as you know it is wrong.

            Same goes for Tigger, go on doing what you do, as long as you know it is wrong and stop posting about how you never cheat on your income tax returns.  Sorry about messing up your screen name, Tiggs95, just seems your mentality is on par with Tigger and it was an easy mistake to make.

              tiggs95's avatar - Lottery-036.jpg

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              Posted: October 22, 2009, 4:08 pm - IP Logged

              PS:If you find a winning ticket say worth 50.00 how do you file that?..Do they  have a line in the tax form for "finders keepers losers weepers?...Can't wait to hear this answer..

                tiggs95's avatar - Lottery-036.jpg

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                Posted: October 22, 2009, 4:11 pm - IP Logged

                truecritic..You said you was sorry in your last post but I knew you was sorry..Good luck in your perfect life..I'll try to be more perfect as I grow older but I don't have much time..Wish me luck..

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                  Kentucky
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                  Posted: October 25, 2009, 10:23 am - IP Logged

                  Anyone that thinks I am a tax expert is mistaken - but I do take time to read rules that apply to me.

                  I posted three articles.   The article I posted about Gambling Sessions was specifically for you, Stack.  In the first 2 paragraphs is how you calculate gambling.  Hint: It's NOT the way you posted above.

                  http://www.lotterypost.com/thread/201998/1437525

                  You can go on doing what you are doing - doesn't bother me in the least, as long as you know it is wrong.

                  Same goes for Tigger, go on doing what you do, as long as you know it is wrong and stop posting about how you never cheat on your income tax returns.  Sorry about messing up your screen name, Tiggs95, just seems your mentality is on par with Tigger and it was an easy mistake to make.

                  The article clearly says "However, the Internal Revenue Code and supporting IRS precedent do not provide any specific guideline on when a gambling activity begins and ends in order to determine whether the particular activity resulted in a win or a loss."

                  How can I be wrong if the IRS has no precedents or guidelines?

                  And by the way, I never thought you were a tax expert.

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                    Kentucky
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                    Posted: October 25, 2009, 11:21 am - IP Logged

                    I called the tax lady who is in business doing tax returns and told her she's been doing my tax returns for the past 15 years and that people on the internet have called me a tax cheat and thief cause I cheat on my taxes..She said "THE INTERNET"??..Thier is your problam stay off the internet...

                     

                    Stack47 you are going to lose no matter what you say..I wish you luck but these experst on here are always right..ask them..If you say the sky is blue they will somehow find it to be red and tell you why..Good luck..

                    You and I understand "casual gambling" and we buy lottery tickets hoping for a significant win and we might spend $1000 or more a year doing that. Maybe our critics only spend $1 a year on the lottery and to them a significant win is $3 on a scatch-off and must report it on their 1040 as income. To me a significant win is when I show my SS card and sign my name on W2-G and that amount is reported to the IRS and then I report it as income on my 1040.

                    I did read one of the articles on a gambling session but it's useless information when the author acknowledged the fact the IRS has no guidelines. And I'm pretty sure that's what your tax lady told you.

                    But even with no IRS guidelines the author still suggests we must "keep a daily diary recording the type of gambling activitiy, the name and address of the store, names of other persons present when you were at the gambling establishment  , and any winnings and losses"

                    ROFL

                      truecritic's avatar - PirateTreasure
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                      Posted: October 25, 2009, 10:48 pm - IP Logged

                      The article clearly says "However, the Internal Revenue Code and supporting IRS precedent do not provide any specific guideline on when a gambling activity begins and ends in order to determine whether the particular activity resulted in a win or a loss."

                      How can I be wrong if the IRS has no precedents or guidelines?

                      And by the way, I never thought you were a tax expert.

                      There is a precedent.

                      Stack, you were advocating "netting" your winnings.  You want to go for a 1 yr period and calculate whether you had more money than you had at the beginning of the year or less.  If you had less, you did not want to report winnings.  For that matter, it sounds like you didn't want to report anything. 


                      U.S. taxpayers, with the exception of some professional gamblers, are not allowed to ‘net’ their wins and losses (that is, combine them and report only the total), but must add up their total wins from each gambling session and report the total as income (part of ‘Other Income,’ line 21 of Form 1040.) 

                      IRS Publication 529 (Miscellaneous Deductions) provides general guidelines.


                      You are correct there is no specific way to define a session - but you can't net your winnings and loses.  And if you only bought 2 lottery tickets in an entire year, one being a winner the other a loser, then your "session" of a year might very well be accepted.  OTOH, if you bought tickets daily with an assortment of winners and losers, I would not believe a "session" of a 365 days would be acceptable.   That would be between you and an auditor.  You might never be challenged without an audit but it doesn't mean you are correct.

                        tiggs95's avatar - Lottery-036.jpg

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                        Posted: October 26, 2009, 9:05 am - IP Logged

                        Stack 47...Please your making to much sense for any of these posters to understand..Let's keep life simple and easy and fololow the rules the IRS has offered..Like you say "When I have to give my SS card and have to make out a tax form then and only then will I and HAVE to pay tax''...I kinda worded it my own way but I think that's what you said..I'm a simple person just trying to get by in the world..oh yeah and to eveyone who called me a thief.,.pffffff

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                          Posted: October 26, 2009, 11:55 am - IP Logged

                          There is a precedent.

                          Stack, you were advocating "netting" your winnings.  You want to go for a 1 yr period and calculate whether you had more money than you had at the beginning of the year or less.  If you had less, you did not want to report winnings.  For that matter, it sounds like you didn't want to report anything. 


                          U.S. taxpayers, with the exception of some professional gamblers, are not allowed to ‘net’ their wins and losses (that is, combine them and report only the total), but must add up their total wins from each gambling session and report the total as income (part of ‘Other Income,’ line 21 of Form 1040.) 

                          IRS Publication 529 (Miscellaneous Deductions) provides general guidelines.


                          You are correct there is no specific way to define a session - but you can't net your winnings and loses.  And if you only bought 2 lottery tickets in an entire year, one being a winner the other a loser, then your "session" of a year might very well be accepted.  OTOH, if you bought tickets daily with an assortment of winners and losers, I would not believe a "session" of a 365 days would be acceptable.   That would be between you and an auditor.  You might never be challenged without an audit but it doesn't mean you are correct.

                          Casinos will track our slot and table play by player cards so that type of gambling session is obvious, but scratch-offs and online lottery are different. With lottery games it's almost impossible to define the length of a gambling session because we can buy a ticket in June and still cash it in November without knowing if we won. Most state lotteries allow up to 180 days to cash a ticket and the "income" isn't determined until we have the ticket validated. We can also buy advanced tickets and the value if any won't be determined until all the drawings are in.

                          Each state has many different lottery games where the results will be know at different times and dates. We could define the start of that gambling session as when we purchased the tickets but the sessions will continue to overlap so we can never say for a fact when the session ends. I'm not just advocation "netting" the winnings, I'm defining my gambling session as one taxable year because the IRS doesn't define it.

                          We don't need a printout of our slot or table play to know if we have a net win or loss during those sessions because we know how much we had when arrived and how much we had went we left. However if we have a significant win during that session that requires us to fill out a W2-G, we can use those printouts to deduct our losses on schedule A. Don't we need at least one winning session to report gambling winnings?

                          Without any IRS record of smaller winnings, it's up to the individual to calculate if in fact they had any gambling winnings. Without any IRS definition of a gambling session the individual must define that too. One of your articles suggested keeping a daily diary of all gambling transactions but, I'm guessing around 95% of all casual lottery gamblers would show a loss for the year keeping accurate records. Why would any losing casual lottery gambler report their total winnings as income then deduct that amount as losses using schedule A when they know by doing so, they will lose their standard deductions; especially when their accurate record keeping shows they lost money for the taxable year?

                          The IRS could define a gambling session as a purchase of any lottery ticket and require players to record the net win or loss of each ticket. To enforce it and prevent fraud, the IRS could force the state lotteries to require players to fill out a form showing all the usual info along with a SS number, issue them a players card that must be used when purchasing and cashing any lottery ticket. But again we know state lotteries show huge profits and the majority of players will still end the year with a gambling loss.

                          Since we hijacked this tread and are talking about legal gambling and casual gamblers. the question of how many players would continue to chase a dream when they have to keep records wasting their time with forests of paperwork to the IRS. When players decide it's not worth the it, the lottery profits will decline. Lotteries are excellent sources for extra state revenues and I seriously doubt any Representative or Senator from any one of those states is going to propose or vote for a Federal tax bill that could drastically reduce their state revenues.

                          Lottery games are designed for casual gamblers and the system to tax winnings is already in place. When scratch-off tickets are printed, the lotteries already know they will profit about 36 cents for every dollar wagered and they already know how many of those tickets will have a value exceeding $599 requiring a W2-G to be filled out. Take away those tickets, my guess that 95% of players will lose money is on the low side. Pick-3 is slightly different because there is no jackpot over $599 and no W2-Gs are issued. The profits are around 49 cents on every dollar wagered and overall the lottery records show there can't be that many individual winners. On Saturday LP's pick-3 predictors simulated wagers of $74,554 with a return of $42,190 (407 winning wagers) showing an overall 43.41% loss. The IRS has no definition of a gambling session but we could define this one day wager as a session and require all the winners to report their winnings. There are too many winners to individually check their yearly winnings but I'm guessing again that 95% will show a yearly loss.

                          Basically you're saying casual gamblers should keep daily records showing all their gambling winnings even though it's known they lost for the year and the IRS has no guidelines defining a gambling session. What's even worse, they only can deduct up to the amount they won on schedule A and they will have to pay more taxes because they will lose their standard deduction.

                          It's a fact lotteries show a profit, a fact they issue W2-Gs on winnings over $599, deduct taxes from winnings over $5000, show no records of who purchases any ticket, and who wins any prize under $599. Somebody suggested it is still cheating absents of a paper trail even though it's a fact there is no IRS guideline defining a gambling session. Next April 15 if it makes you feel better losing money going long form to report you broke even playing the lottery (even though you actually lost), go for it.

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                            Kentucky
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                            Posted: October 26, 2009, 1:07 pm - IP Logged

                            Stack 47...Please your making to much sense for any of these posters to understand..Let's keep life simple and easy and fololow the rules the IRS has offered..Like you say "When I have to give my SS card and have to make out a tax form then and only then will I and HAVE to pay tax''...I kinda worded it my own way but I think that's what you said..I'm a simple person just trying to get by in the world..oh yeah and to eveyone who called me a thief.,.pffffff

                            There are IRS codes and guidelines requiring state lotteries to report winnings over $599 but even after each of those tickets are paid off, they still shows a nice profit. It's pretty simple to me; if every state lottery reports significant winners and shows a profit, where are the gambling winnings?

                            You are being called a tax cheat because some people expect you to prove you won something when there is no record you won anything. They also want us to record the outcome of each gambling session when there is no IRS definition of a gambling session.

                            If we play $1 straight and boxed on a pick-3 number with 3 different digits, the probability is we should expect to win 7 times in the next 1000 drawings (1 straight and 6 boxes). Our bet would be $2000 with a return of $998 ($500 for the straight win and $498 for the box wins) or a net loss of $1002. There is no lottery record of us buying the tickets and any record of the payouts, but some people expect us to report on our 1040 gambling winnings of $998. We could deduct gambling losses of $998 on schedule A, but by doing that we lose our standard deduction and will pay even more in taxes.

                            Common sense: with or without records, when we bet $2000 and lose $1002 we have no gambling income to report.

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                              Posted: October 26, 2009, 1:20 pm - IP Logged

                              I unerstood the last sentence..I might be dumb but I'm not a tax cheat or a thieft..That's Stack for all your help..