Rehash of a 2004 QOW for new members
We won't get into state taxes or the details of standard/itemized
deductions, just the basic IRS premise that gambling winnings
are taxable. And, we won't get into such laughable Internal Revenue
pearls of wisdom like the fact that 'bribes received' are
considered taxable income, yet 'bribes paid' are not deductible
- yes, they REALLY say that.
In a nutshell, if your ticket pays more than $600 (and is more
than 300 to 1) the fronton must file a Form W-2G (cc to you).
If the amount is greater than $5,000 the fronton must also withhold
25 percent (28 percent without a verifiable Taxpayer Identification
Number). If you get whacked like this, it will help if you can
deduct losses (to the extent of winnings) - if you itemize deductions,
that is.
IMPORTANT: Sorry, but even if you choose to ignore it (and
most do), ALL gambling winnings are taxable, PERIOD.
Regardless of the amount.
Two ways around the signing issue (one 'legal', the other not):
'Ten Percent Charlie'
Who will cash your ticket for you for a 10% fee (we can only
guess how HE reports it). This only works if you have a ticket
in your hand - phone account and online bettors are S.O.L. And,
it's illegal.
Below the Radar
Make sure your potential payoff is below the reporting threshold,
and the IRS will never see you. Legal, but doesn't eliminate
your requirement to report winnings (less losses, if you itemize).
How do you play this game?
