Hit the Super on the KD fora buck on a $12 bet. Would appreciate it if any one has any suggestions on how I can get some of that tax take-out back come tax time.
Use a schedule A you get over 98% of it back. Report it as additional income then deduct it on the schedule A . Save some programs, some of your sheets and losing tickets just in case.
Start losing heavily if you are playing $12 Supers!!
You are allowed to deduct losers and gambling losses from winnings you have to report. The thing is not to go overboard. If you win $15K you can say you lost $12K and pay tax on $3K. If you want to avoid trouble you need to pay tax on SOME of it. Just don\'t be cute like deducting $14,999 from the $15,000, and pay tax on $1, that will flag you. If you take trips to AC or Vegas and you have credit card receipts to prove it you can say you lost money playing cards or whatever. Of course you can save your losing tracks tickets as well. It\'s not a bad problem to have! It\'s a different story if you win a million bucks, but if it\'s just a portion of your yearly income you should be okay. If you get stuck call an accountant. HP
HP
Excellent advice...It has been my experience that to have peace of mind you have to give the IRS some \'vig\'...your example of winning 15K, deducting 12K in losses and paying taxes on the 3K is quite similar to my past situations (deduct approx. 75% of losses, pay tax on the remaining 25%...
Thank you sir. I do ocassionally win and have to deal with this! Put together your \"signers,\" knock something down and pay on what\'s left. You have to stay within reasonable parameters to avoid the \"flag\" that causes them to audit your return. My dad once told me, \"if you have to pay taxes it means you came out ahead, so don\'t blow it by screwing around.\" Words to live by. HP
Good advice.Many players with signers, esp pros,keep strict records of losses vs signers(tickets, print outs from ADW\'s etc)
Was flagged once by IRS for a pick six win.Brought proof of offsetting losses and had no problem.Was never flagged again and have signers every year.
Wish Joe Drape would do a piece on signers. NTRA lobbying for years to have the law on withholding repealed. IRS records show minimal gain to US Treasury and there is compelling data which shows the withheld money would create more benefit, to everyone,in the hands of the bettor.
Some very large betting pros/rebaters have to borrow money from Sept thru Dec each year because of withholding on signers during year, law is no good to anyone.
Mike
Mike - I avoid that by keeping my big wins to a minimum. LOL.
In all seriousness, the system is really flawed. The state is scooping money out of every pool. The takeout. That is a TAX isn\'t it? So they take money out of the pool and THEN they tax individual winners when they win more than an arbitrary amount? Takeout + tax? Wow. I\'d like to run that show.
I think there should be a distinction for paramutuel wagering, where those winnings should NOT be taxed because you are getting paid out of a pool that\'s already been taxed.
I\'m available to run NYRA if they want me to step in. Talk about a way to generate money and interest as opposed to slots? Offer the no tax/no signer thing to your players. Some states don\'t collect income tax, why not this, to compete with other gambling jurisdictions?
HP
HP,
Agree,unfortunately the withholding thing is the Feds, Uncle Sam.Don\'t believe too many States, if any, withhold and have never had more than the 28%(??) fed take deducted.
NYRA just hired new General Counsel but not a new CEO, believe that may be a political appointee by Gov Cuomo.Doubt you could do worse running NYRA but the CEO job comes with an enormous amount of external oversight/political pressure,very tough imo.
Mike
There\'s ways to solve it. You could give a small % of the takeout to the feds to make up for what they lose on not nailing the \"signers.\" You could increase handle, thus increasing the feds\' prospective share, and everyone would be happy. The fed could also save money by not having the IRS bother to track it so they could focus on the real crooks out there. I\'m sure if I spent more than 10 minutes thinking about it I could figure out other ways. I have plenty of pressure already here at the coal mine. I\'m here and ready to take over!
HP
HP Wrote:
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> Thank you sir. I do ocassionally win and have to
> deal with this! Put together your \"signers,\"
> knock something down and pay on what\'s left. You
> have to stay within reasonable parameters to avoid
> the \"flag\" that causes them to audit your return.
> My dad once told me, \"if you have to pay taxes it
> means you came out ahead, so don\'t blow it by
> screwing around.\" Words to live by. HP
Brought this subject up to an in-law in FL who is an IRS auditor out there. He said simply... Pigs get fat hogs get slaughtered..
There are a lot of losing tickets at the racetrack that can get picked up and used to offset wins...make sure there are no shoeprints on them and ur good to go..
It\'s a good thing that the IRS doesn\'t enforce this stuff to the letter of the law. Technically, a gambler who is not a professional is supposed to keep track of every bet made and add all the net winning amounts to his income and then deduct all losses up to the amount of those net winnings. Once in a blue moon someone gets into real trouble because of this, mainly at the state level. For the feds, it washes out, although in some prior years it could have caused an Alternate Minimum Tax to kick in. But in NY State the letter of the law can really kick one in the butt. Since NYS tax law states that once your income reaches $100,000 your itemized deductions are reduced by at least 25%, you can lose money, but if the combination of your income + gambling winnings goes over $100,000, you lose at least 25% of your deduction dollars. Here are 3 NYS cases that went to the courts if you\'re interested in reading, in some states they don\'t allow you to deduct ANY losses to offset your \"winnings\":
http://www.nysdta.org/Determinations/822130.det.htm
http://www.nysdta.org/Determinations/821982.det.htm
http://www.nysdta.org/Decisions/812919.dec.htm
Thanks to all for the advice.
Toppled - I read these. I\'m not a lawyer. Here\'s what I see.
Case 1 - Gambling winnings constituted the majority of income. This may have triggered a flag since this might have made them look like PROFESSIONALS, since it was MOST of their income, and that invited a whole new layer of scrutiny, over and above her next problem. Her total deductions EXCEEDED her winnings. As per my post, this will get you audited. She had deductions that encompassed all of the winnings, and then used even more deductions to go past that and offset her income.
Case 2 - They reported less to New York State than they did to the Feds. By A MILLION DOLLARS. Idiots. Next.
Case 3 - Reported losses in excess of winnings. In fact this is exactly what my original post said. If you do this, forget it.
None of these cases are about offsetting a big hit with some losses. Each one typifies greed, and what happens when you try to play games.
All that stuff about deduction dollars and 25% may be true, but if you pay tax on at least some of your winnings you will avoid this kind of thing. All three cases above are examples of what NOT to do, as per my post. People win $250K and think it\'s an opportunity get a bigger refund. Unreal.
HP
All these IRS horror stories make me even prouder to be a Canadian.
Had a poster on this board, an American citizen, come visit last fall and spend the evening at Woodbine. He showed us local hayseeds how to handicap hitting a very substantial pick 4. He was very happy to find out no tax deducted, no ID required.
O Canada...
Frank
1) Just get a good accountant who knows about these matters--never do your taxes by yourself if you gamble. I have avoided so many problems by paying someone who handles all the audits and inquiries which I seem to get almost every year.
2) See if you\'re ahead towards the end of the year; if you still are, you may want to gather losing tickets and programs and racing forms (start in August or September) in an attempt to document more losses. Do you use a wagering account? If so, you probably have accurate records of wins and losses, so you don\'t need or want to gather losing tickets in that case b/c they won\'t be accepted.
3) Just enjoy the winnings for now. Making a big score in May is no gurantee of being ahead in December, so I really wouldn\'t worry about it. If you\'re a very small player, and you know you won\'t come close to throwing it back, then you should start documenting lossses now. Worst case scenario, even if you do throw a lot back is that you\'d be legit in claiming lossess and get a huge refund back in 2013. You can\'t lose either way really.
Enjoy the win--they don\'t come around too often like that.
One word of caution-if you\'ve never claimed lossess close to that amount you may not want to try that b/c it will look suspicious. Best case is to follow the rules (even though they suck) so you don\'t have to worry too much. My accountant is a very straight guy who never does anything illegal--better that way really--much less stress.
I believe I have met this American poster of whom you speak, and have seen him scrupulously record numbers on a piece of paper, so I\'m sure he\'s right with the IRS.
And for all our friends north of the border in the vicinity of Lake Ontario, please look out for that minivan with New York plates swinging that towed boat across lanes like a blackjack ... that\'ll be my father-in-law again.
Dana666 Wrote:
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> One word of caution-if you\'ve never claimed
> lossess close to that amount you may not want to
> try that b/c it will look suspicious. Best case is
> to follow the rules (even though they suck) so you
> don\'t have to worry too much. My accountant is a
> very straight guy who never does anything
> illegal--better that way really--much less stress.
The only problem with the above Dana is that his previous reported losses were capped by the amount won previously so if this is an extraordinary year winwise it doesn\'t mean he should not report a higher amount of losses this year just to keep in line with previously reported amounts. If you have the proof to offset the winnings there is no reason you should not claim them.
Thing is, if you don\'t have signers you really don\'t have the opportunity to report losses? You can\'t just make a tax deduction because you lose money gambling? In a way it\'s exactly like capital gains/losses. You can only offset the capital losses from capital gains, so if you don\'t have any gains, you have to carry the losses forward for awhile UNTIL you have gains to deduct them from. You can\'t just deduct the losses from your income. Same with gambling. You need winners/signers to have the means to deduct the losses.
So if one year you don\'t report any losses and next year you have big winners and offset them somewhat with losses I don\'t think they view that as out of line at all. The more I think about it, it really is EXACTLY like the market and capital gains/losses. That\'s why my idea to let the feds take 1% out of the takeout instead makes so much sense. The way it\'s set up now they only get a fraction of the tax on winnings since the winnings have to be over a certain amount to trigger the whole thing. My way they can make money every damn day and leave us alone when we win.
HP
Of course, if they\'re actual losses. I was under the impression he was asking how do I claim losses even if I haven\'t really lost--you know finding losing tickets and that kind of thing. I once knew this old dude who would always sign for everyone--he did it for years, eventually he got busted and went to jail!
Dana666 Wrote:
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> Of course, if they\'re actual losses. I was under
> the impression he was asking how do I claim losses
> even if I haven\'t really lost--you know finding
> losing tickets and that kind of thing. I once knew
> this old dude who would always sign for
> everyone--he did it for years, eventually he got
> busted and went to jail!
How was that possible??...The only thing I can see is if that guy didn\'t file any returns for those years..Seriously, do you know what happened? I do the taxes for a bunch of those signers and I need to know.
I think when people would win, he would offer to sign for them, and then over the course of the year, he would collect losing tickets and then claim lossess at the end of the year so he would get a lot back the next year, whatever was withheld. I suppose the guys whom he signed for threw him a few dollars here and there too, but he went to jail for several years for tax fraud. I still don\'t really get why they would let/want him to sign for them in the first place, but this went on for many years, and then the IRS and FBI invesitaged and he was gone! He\'s back now by the way at the same track, a little worse for wear.
Dana666 Wrote:
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> I think when people would win, he would offer to
> sign for them, and then over the course of the
> year, he would collect losing tickets and then
> claim lossess at the end of the year so he would
> get a lot back the next year, whatever was
> withheld. I suppose the guys whom he signed for
> threw him a few dollars here and there too, but he
> went to jail for several years for tax fraud. I
> still don\'t really get why they would let/want him
> to sign for them in the first place, but this went
> on for many years, and then the IRS and FBI
> invesitaged and he was gone! He\'s back now by the
> way at the same track, a little worse for wear.
Are you sure the gambling winnings were the reason for the tax fraud charges. Something doesn\'t seem right. Especially if the FBI was involved. Sounds like internet gambling or something...Could be wrong but I don\'t think the FBI would be chasing down a signer.
I know something def. wasn\'t right! I never got close enough to the situation to know all the detail. I know he was signing for people though--he did it for many years.
Dana666 Wrote:
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> I know something def. wasn\'t right! I never got
> close enough to the situation to know all the
> detail. I know he was signing for people
> though--he did it for many years.
Thanks Dana , I can almost guarantee there was more going on than just the signing..