Help! I hit the Super.

[joekay]

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.

[basket7777]

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.

[Silver Charm]

Start losing heavily if you are playing $12 Supers!!

[HP]

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

[trackjohn]

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%...

[HP]

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

[miff]

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 NTRA lobbying for years to have the law on withholding repealed.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

[HP]

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

[miff]

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

[HP]

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

[Lost Cause]

HP Wrote:
-------------------------------------------------------
> 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..

[toppled]

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

[joekay]

Thanks to all for the advice.

[HP]

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

[Frank]

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