Welcome Guest
Log In | Register )
You last visited December 8, 2016, 2:47 am
All times shown are
Eastern Time (GMT-5:00)

TAX... lower tier prizes

Topic closed. 86 replies. Last post 3 years ago by mikeintexas.

Page 5 of 6
3.54
PrintE-mailLink
Slick Nick's avatar - Lottery-035.jpg
Rochester
United States
Member #103282
January 1, 2011
603 Posts
Offline
Posted: December 9, 2013, 10:13 am - IP Logged

LOL

Money is a terrible master, but a great servant...Smile

    p4wanbi's avatar - Lottery-062.jpg
    WA
    United States
    Member #122238
    January 27, 2012
    180 Posts
    Offline
    Posted: December 9, 2013, 10:28 am - IP Logged

    Speaking from recent experiences, and I think someone has clarified it already but I will summary it with this. 

     

    1. When I won a $500.00 ticket on Pick3 straight, I can cash it instantly at any store with lottery machines. 

    2. When I won a $600.00 ticket on a Pick4, I need to take it to the lottery claiming center with a form download available online. (this is strictly VA not sure about others)

    3. When I won a $26,000 I was told taxes will be deducted right at the counter, 25% federal taxes and 4% state taxes = 29% altogether. The after tax paycheck was $18,xxx.xx. 

    4. When I won a $2,000 ticket, I was told taxes will not be taken off at the counter but will need to report net income on tax forms by end of the year. 

    5. With any check cut out to you, tax forms already tagged along with it. You need to save all the forms for year-end tax filing purpose. 

    6. The clerk at the claiming center would recommend you to play $1.00 on every single ticket instead of big sum, so lets say you want to play $10.00 on certain numbers, whether 50/50, boxed ($12.00) single, straight, any order, you would do single ticket which in this case you have 10 single tickets. This way if you hit, you have a good chance of getting paid big chunk but little taxes or almost no taxes. The clerk said you can get get paid at the lottery merchants and you can do this for 10 tickets at 10 different locations or even one location (if they have the money) and you dont have to pay taxes. I was surprised she told me that as she works for the state gorvernment and she should be advised to not giving people ideas of running away from taxes.

     

    there you go, hopefully that helps!

    playing what can be afforded...spend half of what was reclaimed.

      Jon D's avatar - calotterylogo
      Los Angeles, California
      United States
      Member #103813
      January 5, 2011
      1530 Posts
      Offline
      Posted: December 9, 2013, 11:13 am - IP Logged

      Speaking from recent experiences, and I think someone has clarified it already but I will summary it with this. 

       

      1. When I won a $500.00 ticket on Pick3 straight, I can cash it instantly at any store with lottery machines. 

      2. When I won a $600.00 ticket on a Pick4, I need to take it to the lottery claiming center with a form download available online. (this is strictly VA not sure about others)

      3. When I won a $26,000 I was told taxes will be deducted right at the counter, 25% federal taxes and 4% state taxes = 29% altogether. The after tax paycheck was $18,xxx.xx. 

      4. When I won a $2,000 ticket, I was told taxes will not be taken off at the counter but will need to report net income on tax forms by end of the year. 

      5. With any check cut out to you, tax forms already tagged along with it. You need to save all the forms for year-end tax filing purpose. 

      6. The clerk at the claiming center would recommend you to play $1.00 on every single ticket instead of big sum, so lets say you want to play $10.00 on certain numbers, whether 50/50, boxed ($12.00) single, straight, any order, you would do single ticket which in this case you have 10 single tickets. This way if you hit, you have a good chance of getting paid big chunk but little taxes or almost no taxes. The clerk said you can get get paid at the lottery merchants and you can do this for 10 tickets at 10 different locations or even one location (if they have the money) and you dont have to pay taxes. I was surprised she told me that as she works for the state gorvernment and she should be advised to not giving people ideas of running away from taxes.

       

      there you go, hopefully that helps!

      Yep, your personal experiences match up with the instructions for W-2G and the rules for reporting and withholding.

      But you bring up a valid point with #6: multi-line tickets.

      If you buy 2 lines of pick 3 str on one ticket and both numbers hit for $500, you have a $1000 winning ticket and have to go to a claims center and it gets reported. If you bought two single line tickets, each ticket would be $500 and you could cash at any retailer and it would not be reported.

      Either way, the winnings are still the same, but one way is reported the other is not. It should be reported when you file in either case. People might think they can avoid taxes in the latter case, but that would be against the law, if they had income from the winnings at the end of the year that could not be offset by deducting losses.

      Also, if you were a casual player and never kept records, but you at least kept losing tickets, you could still be caught by multi-line tickets. If you bought a 5 line Powerball ticket and won $4 on 1 line, well, you gave away the $10 ticket to cash it so you have no record of the losses, unless you took a photocopy beforehand or made a record of it. If you bought 5 single line tickets instead, you'd still have 4 losing tickets that could be used for deductions.

      P.S. I'm not surprised a government worker was advising people on how to cheat the government.

        rdgrnr's avatar - walt
        Way back up in them dadgum hills, son!
        United States
        Member #73904
        April 28, 2009
        14903 Posts
        Offline
        Posted: December 9, 2013, 11:26 am - IP Logged

        Speaking from recent experiences, and I think someone has clarified it already but I will summary it with this. 

         

        1. When I won a $500.00 ticket on Pick3 straight, I can cash it instantly at any store with lottery machines. 

        2. When I won a $600.00 ticket on a Pick4, I need to take it to the lottery claiming center with a form download available online. (this is strictly VA not sure about others)

        3. When I won a $26,000 I was told taxes will be deducted right at the counter, 25% federal taxes and 4% state taxes = 29% altogether. The after tax paycheck was $18,xxx.xx. 

        4. When I won a $2,000 ticket, I was told taxes will not be taken off at the counter but will need to report net income on tax forms by end of the year. 

        5. With any check cut out to you, tax forms already tagged along with it. You need to save all the forms for year-end tax filing purpose. 

        6. The clerk at the claiming center would recommend you to play $1.00 on every single ticket instead of big sum, so lets say you want to play $10.00 on certain numbers, whether 50/50, boxed ($12.00) single, straight, any order, you would do single ticket which in this case you have 10 single tickets. This way if you hit, you have a good chance of getting paid big chunk but little taxes or almost no taxes. The clerk said you can get get paid at the lottery merchants and you can do this for 10 tickets at 10 different locations or even one location (if they have the money) and you dont have to pay taxes. I was surprised she told me that as she works for the state gorvernment and she should be advised to not giving people ideas of running away from taxes.

         

        there you go, hopefully that helps!

        "The clerk said you can get get paid at the lottery merchants and you can do this for 10 tickets at 10 different locations or even one location (if they have the money) and you dont have to pay taxes."

        Well, she just told you how to avoid paying the taxes due on your winnings under law.

        Can you get away with it? Yes, apparently you can, according to that person from Kentucky who apparently does it all the time and recommends it.

        But is it legal? No.

        People have been caught and prosecuted for doing just that. In fact I remember reading a Lottery Post News Forum story about that very thing a while back. So I recommend against it.

        Honesty is always the best policy.

        And never take legal or tax advice from some dumb hick in Kentucky, talk to a lawyer or a tax specialist.

          Avatar
          NY
          United States
          Member #23835
          October 16, 2005
          3474 Posts
          Offline
          Posted: December 9, 2013, 4:10 pm - IP Logged

          Would that be your definition that defines betting $1 billion to win $1 gambling winnings?

          Do you have any real experience with "lottery winnings" or are just offering the usual BS?

          I used to think you were one of the smarter people here. If I've won a million dollars and not been audited my experince with winning doesn't really tell me   anything about the IRS's feelings on the matter, except that they didn't feel aneed to audit me. If you  won a couple of grand and reported no income because of your losses, the fact that you assume you did things correctly just because you weren't audited remains a simple assumption.

          Do you have any experience with reading the IRS rules?

            Avatar
            Kentucky
            United States
            Member #32652
            February 14, 2006
            7313 Posts
            Offline
            Posted: December 9, 2013, 4:14 pm - IP Logged

            "The clerk said you can get get paid at the lottery merchants and you can do this for 10 tickets at 10 different locations or even one location (if they have the money) and you dont have to pay taxes."

            Well, she just told you how to avoid paying the taxes due on your winnings under law.

            Can you get away with it? Yes, apparently you can, according to that person from Kentucky who apparently does it all the time and recommends it.

            But is it legal? No.

            People have been caught and prosecuted for doing just that. In fact I remember reading a Lottery Post News Forum story about that very thing a while back. So I recommend against it.

            Honesty is always the best policy.

            And never take legal or tax advice from some dumb hick in Kentucky, talk to a lawyer or a tax specialist.

            Looks like you're still unsuccessfully trying to play the cyber bully and pretending you understand the IRS tax codes on "gambling winnings".

            "But is it legal? No."

            Are you pretending to be an IRS agent now to impress your SAHM groupies?

            If you have any experience winning a significant unreported lottery prize, tell us you handled line 21 and if you have never won a significant prize, shut your pie hole.

            "People have been caught and prosecuted for doing just that. In fact I remember reading a Lottery Post News Forum story about that very thing a while back."

            Since you're unable to post a link, why don't you just explain to us how the IRS could find out that someone cashed three $400 box wins last month and collected $1200?

            Give us some real examples where real lottery players (not the phonies like you) collected hundreds or even thousands in unreported lottery winnings, never declared the winnings on their 1040, and were caught and prosecuted. It should be easy for you to find one LP member who was caught and prosecuted by the IRS.

            "Honesty is always the best policy."

            Except when you're trying to impress your SAHM groupies by lying about what I said. Why haven't you copy and paste, quoting where I suggested to anyone not to declare their unreported lottery winnings if you're not a liar?

            "And never take legal or tax advice from some dumb hick in Kentucky,"

            Do you have something against the people in Kentucky now?

              Avatar
              NY
              United States
              Member #23835
              October 16, 2005
              3474 Posts
              Offline
              Posted: December 9, 2013, 4:23 pm - IP Logged

              Speaking from recent experiences, and I think someone has clarified it already but I will summary it with this. 

               

              1. When I won a $500.00 ticket on Pick3 straight, I can cash it instantly at any store with lottery machines. 

              2. When I won a $600.00 ticket on a Pick4, I need to take it to the lottery claiming center with a form download available online. (this is strictly VA not sure about others)

              3. When I won a $26,000 I was told taxes will be deducted right at the counter, 25% federal taxes and 4% state taxes = 29% altogether. The after tax paycheck was $18,xxx.xx. 

              4. When I won a $2,000 ticket, I was told taxes will not be taken off at the counter but will need to report net income on tax forms by end of the year. 

              5. With any check cut out to you, tax forms already tagged along with it. You need to save all the forms for year-end tax filing purpose. 

              6. The clerk at the claiming center would recommend you to play $1.00 on every single ticket instead of big sum, so lets say you want to play $10.00 on certain numbers, whether 50/50, boxed ($12.00) single, straight, any order, you would do single ticket which in this case you have 10 single tickets. This way if you hit, you have a good chance of getting paid big chunk but little taxes or almost no taxes. The clerk said you can get get paid at the lottery merchants and you can do this for 10 tickets at 10 different locations or even one location (if they have the money) and you dont have to pay taxes. I was surprised she told me that as she works for the state gorvernment and she should be advised to not giving people ideas of running away from taxes.

               

              there you go, hopefully that helps!

              I can go you one better. I once called the IRS to get some information my employer sent me a W2 characterizing some of my income as disability pay with nothing withheld, after I took some time off after breaking my leg. The IRS employee I spoke to me told me that the IRS would have no knowledge that I was paid that income until I sent the W2 in with my tax return.

              Do you think the IRS employee was telling me it wasn't taxable income just because they told me how to make it a virtual certainty that the IRS would never know I had earned that income if I didn't declare it?

              Lest anyone think they should just hang on to a W2 next April, I'll note that this happened a long time ago, before computers were cheap, fast, and powerful. Keeping a W2 and not reporting the income now is almost certainly a guaranteed way to start an unpleasant interaction with the IRS.

                Avatar
                Kentucky
                United States
                Member #32652
                February 14, 2006
                7313 Posts
                Offline
                Posted: December 9, 2013, 4:46 pm - IP Logged

                I used to think you were one of the smarter people here. If I've won a million dollars and not been audited my experince with winning doesn't really tell me   anything about the IRS's feelings on the matter, except that they didn't feel aneed to audit me. If you  won a couple of grand and reported no income because of your losses, the fact that you assume you did things correctly just because you weren't audited remains a simple assumption.

                Do you have any experience with reading the IRS rules?

                "If you  won a couple of grand and reported no income because of your losses, the fact that you assume you did things correctly just because you weren't audited remains a simple assumption."

                Maybe some common sense will help and I'll use an LP member as an example. One Ohio Classic Lotto ticket won $1500 early in 2013, but since then the LP member has lost most or maybe all of the winnings. Those "winnings" were reported to the IRS, so regardless whether that player lost every penny and lost thousands more, they must show those reported winnings on line 21. Anyone dealing with capital gains (or losses) understands Schedule "A" and tax payers can use it to deduct up to the amount of their gambling winnings.

                Our LP member can document every lottery loss and deduct the entire $1500 using Schedule "A". The topic is unreported gambling winnings and losses and the question is "Is it illegal for any casual gambler to deduct their losses from their wins and declare $0.00 in gambling winnings"?

                "Do you have any experience with reading the IRS rules?"

                I have lots of experience in calling the IRS and asking for their definitions. Do you have the IRS definition of a casual gambler's gambling winnings in writing?

                Do you have it writing where the IRS will seek out and hunt down any and all casual who fail to declare all the scratch-off winnings on line 21 regardless of how much they lost?

                  Avatar
                  NY
                  United States
                  Member #23835
                  October 16, 2005
                  3474 Posts
                  Offline
                  Posted: December 9, 2013, 6:10 pm - IP Logged

                  "If you  won a couple of grand and reported no income because of your losses, the fact that you assume you did things correctly just because you weren't audited remains a simple assumption."

                  Maybe some common sense will help and I'll use an LP member as an example. One Ohio Classic Lotto ticket won $1500 early in 2013, but since then the LP member has lost most or maybe all of the winnings. Those "winnings" were reported to the IRS, so regardless whether that player lost every penny and lost thousands more, they must show those reported winnings on line 21. Anyone dealing with capital gains (or losses) understands Schedule "A" and tax payers can use it to deduct up to the amount of their gambling winnings.

                  Our LP member can document every lottery loss and deduct the entire $1500 using Schedule "A". The topic is unreported gambling winnings and losses and the question is "Is it illegal for any casual gambler to deduct their losses from their wins and declare $0.00 in gambling winnings"?

                  "Do you have any experience with reading the IRS rules?"

                  I have lots of experience in calling the IRS and asking for their definitions. Do you have the IRS definition of a casual gambler's gambling winnings in writing?

                  Do you have it writing where the IRS will seek out and hunt down any and all casual who fail to declare all the scratch-off winnings on line 21 regardless of how much they lost?

                  Do you think we can't tell when you're trying to change the question?

                  The IRS discusses "gambing winnings", "gambling losses, and "gambling income" in many publications. I trust you know how Google works.

                    Avatar
                    Kentucky
                    United States
                    Member #32652
                    February 14, 2006
                    7313 Posts
                    Offline
                    Posted: December 9, 2013, 7:15 pm - IP Logged

                    I can go you one better. I once called the IRS to get some information my employer sent me a W2 characterizing some of my income as disability pay with nothing withheld, after I took some time off after breaking my leg. The IRS employee I spoke to me told me that the IRS would have no knowledge that I was paid that income until I sent the W2 in with my tax return.

                    Do you think the IRS employee was telling me it wasn't taxable income just because they told me how to make it a virtual certainty that the IRS would never know I had earned that income if I didn't declare it?

                    Lest anyone think they should just hang on to a W2 next April, I'll note that this happened a long time ago, before computers were cheap, fast, and powerful. Keeping a W2 and not reporting the income now is almost certainly a guaranteed way to start an unpleasant interaction with the IRS.

                    "Keeping a W2 and not reporting the income now is almost certainly a guaranteed way to start an unpleasant interaction with the IRS."

                    W-2Gs are issue when the prize is paid and they don't usually send out a reminder in January or April. And if a tax payer forgot about the W-2G, the IRS will gladly amend their tax return and send them a bill. We all can agree it's not very smart to not include reported income on a 1040, but we're talking about non-reported income.

                    "Do you think the IRS employee was telling me it wasn't taxable income"

                    They were probably telling you if your employer sent you a W2, they sent a copy to the IRS. I'm pretty sure the question here is about unreported lottery winnings with no W-2Gs and the legalities.

                    "The IRS discusses "gambing winnings", "gambling losses, and "gambling income" in many publications."

                    There is a difference between "casual and professional" gambler, but that doesn't change the fact the IRS does not defined some gambling terms like "gains" and "losses".

                    "In applying § 165(d), it is necessary to interpret the words “gains” and “losses”
                    from wagering transactions.  These terms are not defined in the Code, regulations,
                    legislative history, or published guidance.  As discussed below, courts have differed in
                    interpreting the terms."   -----   www.irs.gov/pub/irs-utl/am2008013.pdf

                    "I trust you know how Google works."

                    But apparently you don't.

                      grwurston's avatar - Cute animals_Spider.jpg
                      Winning makes me smile.
                      bel air maryland
                      United States
                      Member #90251
                      April 24, 2010
                      4874 Posts
                      Offline
                      Posted: December 9, 2013, 8:09 pm - IP Logged

                      http://shar.es/OnARe  Check out this link for the difference between casual and professional gamblers and the

                      tax differences.

                      "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.

                        rdgrnr's avatar - walt
                        Way back up in them dadgum hills, son!
                        United States
                        Member #73904
                        April 28, 2009
                        14903 Posts
                        Offline
                        Posted: December 9, 2013, 9:36 pm - IP Logged

                        Looks like you're still unsuccessfully trying to play the cyber bully and pretending you understand the IRS tax codes on "gambling winnings".

                        "But is it legal? No."

                        Are you pretending to be an IRS agent now to impress your SAHM groupies?

                        If you have any experience winning a significant unreported lottery prize, tell us you handled line 21 and if you have never won a significant prize, shut your pie hole.

                        "People have been caught and prosecuted for doing just that. In fact I remember reading a Lottery Post News Forum story about that very thing a while back."

                        Since you're unable to post a link, why don't you just explain to us how the IRS could find out that someone cashed three $400 box wins last month and collected $1200?

                        Give us some real examples where real lottery players (not the phonies like you) collected hundreds or even thousands in unreported lottery winnings, never declared the winnings on their 1040, and were caught and prosecuted. It should be easy for you to find one LP member who was caught and prosecuted by the IRS.

                        "Honesty is always the best policy."

                        Except when you're trying to impress your SAHM groupies by lying about what I said. Why haven't you copy and paste, quoting where I suggested to anyone not to declare their unreported lottery winnings if you're not a liar?

                        "And never take legal or tax advice from some dumb hick in Kentucky,"

                        Do you have something against the people in Kentucky now?

                        " explain to us how the IRS could find out that someone cashed three $400 box wins last month and collected $1200?"

                        You just don't get it, do you, numbnuts?

                        You're a cheat and a thief and a chiseler and a crook by nature and that's why you ask a question like that.

                        You keep talking about how you can get away with not paying your taxes by not declaring all your winnings.

                        And I keep explaining how that is wrong and illegal, you insufferable moron!

                        I'm tired of trying to explain simple things to you, mutton-head.

                        You won't listen to logic or common sense and you especially won't listen to the law so I'm not going to waste my time.

                        Now listen up, schmuck-weasel, if you don't want to pay your taxes, that's your business, but don't go advising newcomers to try and get away with it unless you're going to pay their penalties or serve their jail time. Not your job. Mind your own business.

                         

                         " Do you have something against the people in Kentucky now?"

                         No, I have good friends in Kentucky, it's just the really dumb, obnoxious hicks like you that grate on people's nerves.

                         Now go brush your tooth and go to bed.

                          mikeintexas's avatar - tx avatar-1.gif
                          Texas Panhandle
                          United States
                          Member #136843
                          December 20, 2012
                          1279 Posts
                          Offline
                          Posted: December 10, 2013, 1:59 am - IP Logged

                          I started to make a new thread, then decided this one would do b/c it's about taxes.

                          Hard to phrase my question, but let's take a hypothetical situation:  Let's say you won the Mega Millions JP Tuesday night but waited until after Jan. 1st to claim it; would it count as winnings in 2013 b/c you hit the lottery then or in 2014 b/c that's when the money was transferred to your account?  If it's the latter, then you could make a significant amount of money on the difference between what they take out at first (25%) and what you have to finish paying (another 14.6%).  Seems to me if you claimed the money after the first of the year, you wouldn't have to pay the rest of the taxes owed until April '15.  My math might be wrong (a distinct possibility) but I figure you could (conservatively) make over a quarter million bucks in a year on the 27 million you still owed to Uncle Sam.

                            p4wanbi's avatar - Lottery-062.jpg
                            WA
                            United States
                            Member #122238
                            January 27, 2012
                            180 Posts
                            Offline
                            Posted: December 10, 2013, 7:55 am - IP Logged

                            no. Uncle Sam just won't let you do that. I don't think you can outsmart the IRS in anyway possible. If you won the mega jackpot tuesday night and waited 'til after Jan. 1st to claim it, it will be counted toward 2013. The actual winning occurs at the time of the drawing hence the date stated on your ticket. Everything on your ticket should state the respective year you purchase it. I'm sure you know the reason why there is a 180 days for you to claim the jackpot or any winnings or else it will expire. There is always a deadline and timing is detrimental.

                            playing what can be afforded...spend half of what was reclaimed.

                              Jon D's avatar - calotterylogo
                              Los Angeles, California
                              United States
                              Member #103813
                              January 5, 2011
                              1530 Posts
                              Offline
                              Posted: December 10, 2013, 9:55 am - IP Logged

                              no. Uncle Sam just won't let you do that. I don't think you can outsmart the IRS in anyway possible. If you won the mega jackpot tuesday night and waited 'til after Jan. 1st to claim it, it will be counted toward 2013. The actual winning occurs at the time of the drawing hence the date stated on your ticket. Everything on your ticket should state the respective year you purchase it. I'm sure you know the reason why there is a 180 days for you to claim the jackpot or any winnings or else it will expire. There is always a deadline and timing is detrimental.

                              Actually, the winnings are taxable in the year in which you are paid, not the draw date. So if you win the 12/31/13 draw, your winnings would be counted for 2014. But there are limits, such as 60 days to choose the annuity or cash option.

                              From the W-2G instructions:

                              A payment of winnings is considered made when it is paid, either actually or constructively, to the winner. Winnings are constructively paid when they are credited to, or set apart for, that person without any substantial limitation or restriction on the time, manner, or condition of payment. However, if not later than 60 days after the winner becomes entitled to the prize, the winner chooses the option of a lump sum or an annuity payable over at least 10 years, the payment of winnings is considered made when actually paid. If the winner chooses an annuity, file Form W-2G each year to report the annuity paid during that year.