$1 combinations better than $2 plus combos for tax purposes

[fishorsechess]

I read this yesterday in one of the Gambling for Dummies or Idiots
books at the bookstore. It mentions that its better to make
bets in 1 dollar increments than 2 or above because at 1 dollar
the IRS 1099 form kicks in at 600-1 whereas at 2 dollasr its 300-1.
Is this really true? So making smaller bets helps avoid the IRS
or at least temporarily prevents taking their cut at the window rightaway.

[Valuist]

Its true up to a point. If you hit a P3 in which the $2 payoff is $1199 and you have a dollar ticket, there's no W-2 to fill out. Once that payoff jumps over $1200 for $2 (surcharges not withstanding), you'll have to sign if you have a dollar ticket. Really no reason not to punch out P3s,P4s and tris in $1 increments. A little more time consuming I guess if one is playing in large units.

[hurrikane]

This is what I suspected.

Have you ever actually bet on a horse race fish?

[fishorsechess]

I know what you are getting at. You think I am all talk and no do.
Well most of the horseplayers on this board are DREAMERS
and not BETTORS. The same goes with sexaul prowess.
Ask a guy and he will definitely lie about how many women
he has slept with. Ask any horseplayer here and they will
only talk about one big score they had but not the lossses.

[hurrikane]

is that a no?

[cato]

Wow, fish that came from nowhere. I'd say you might have some unresolved issues :cool:

Fish said: "I know what you are getting at. You think I am all talk and no do.
Well most of the horseplayers on this board are DREAMERS
and not BETTORS. The same goes with sexaul prowess.
Ask a guy and he will definitely lie about how many women
he has slept with. Ask any horseplayer here and they will
only talk about one big score they had but not the lossses."

Good luck with all that,

Cato

[fishorsechess]

I know many horseplayers that go to the track and either they
don't bet: the smart ones. Or THINK THEY KNOW what they
are doing and lose their shirt. How many horseplayers win
at the track daily? Less than 5 percent. Something else lots of
players haven't thought of. When they do become consistent
winners, a snowballs chance in hell, it will make the IRS very happy.

[hurrikane]

definately a no.

[fishorsechess]

yes. End of story.

[Dancer's Image]

Its true up to a point. If you hit a P3 in which the $2 payoff is $1199 and you have a dollar ticket, there's no W-2 to fill out. Once that payoff jumps over $1200 for $2 (surcharges not withstanding), you'll have to sign if you have a dollar ticket. Really no reason not to punch out P3s,P4s and tris in $1 increments. A little more time consuming I guess if one is playing in large units.


Could you make that answer any more confusing, Valuist?

As I understand it, the magic number is 600-1...meaning if you have a $1 ticket that pays >$600, you get a W-2; if you have a $2 ticket that pays >$1200 you get a W-2; but a $2 ticket for $600-$1200, you do NOT sign a W-2.

Now, further confusing the issue, (and I don't have any experience with larger race tickets because I'm a $1-2 bettor), is what happens if you have a $5 or $10 exotic bet. Is it still 600-1 or $1200 for the W-2 cut-off? The reason I ask is because I know that on a $5 poker machine, for max coins in, ie. $25 bet, if you hit a straight flush for a 250-1 payoff, you get $1250 and a W-2.

[hurrikane]

it is 300-1 or $600.00

the 300-1 is the key.

[Valuist]

DI-

I don't know what's confusing about what I said. Everything is true. And the 600-1 rate does not change if its a $5, $10 or $1000 ticket.

[GameTheory]

it is 300-1 or $600.00

the 300-1 is the key.
Correct. I had been betting for years before I found out about this, actually, so you don't have to be a newbie, just stupid I guess. I had a $1 ticket worth about $400 and I just stuck it in the autotote machine and out came my voucher. I was sure it was going to instruct me to go to a teller window to fill out a tax form...

[chickenhead]

How does that $600 limit work? On a win wager for example, $100W (on a single ticket) on a 7-1 brings a trip to the IRS window?

[GameTheory]

Actually, we should have said it has to be 300-1 (at least) AND $600 (at least). Correct?

[chickenhead]

Ah so...that makes sense.

[Valuist]

In any event, the rule really needs to be changed. Hit a P3 for $601 and you get a W-2 while somebody who bets $10,000 to win on a 5-1 shot need not worry about any paperwork. Sure you can write it off, assuming you itemize, but that only applies to the Federal return. Can't write if off on state taxes.

[Dancer's Image]

Ok, now I'm confused. I wasn't until reading this thread. First FHC asks...

"at 1 dollar
the IRS 1099 form kicks in at 600-1 whereas at 2 dollasr its 300-1.
Is this really true?"

...then Valuist comes in and says...

"Its true up to a point. If you hit a P3 in which the $2 payoff is $1199 and you have a dollar ticket, there's no W-2 to fill out."

...now even though Valuist doesn't think that's confusing, it most certainly is! It's not true up to any point! The W-2 kicks in at 600-1, or $600 for a $1 ticket and $1200 for a $2 ticket..

But then hurricane comes and says...

"it is 300-1 or $600.00

the 300-1 is the key."

...that is just wrong, and Game Theory confirms that it's wrong with his post...

"Correct. I had been betting for years before I found out about this, actually, so you don't have to be a newbie, just stupid I guess. I had a $1 ticket worth about $400 and I just stuck it in the autotote machine and out came my voucher. I was sure it was going to instruct me to go to a teller window to fill out a tax form..."

...although in the spirit of mass confusion, or confusing the masses, GT has to incorrectly agree with hurricane who posted the 300-1.

For the record, I will reiterate that the W-2 form is used for wins of $600 or more on a $1 ticket or $1200 on a $2 ticket. It is 600-1, not 300-1.

[chickenhead]

from xpressbet website:

According to IRS requirements XpressBet must report all gambling winnings in the amount of $600 or more if such winnings are at least 300 times the amount of a single wager.

These winnings are reported to the IRS electronically and XpressBet account holders are mailed a copy of a W2G form to file with their taxes.

Winnings of more than $5,000 from a wagering transaction are subject to federal income tax withholding and XpressBet must withhold 25% of the payoff.

There are no exceptions to these requirements.

[skate]

as far as i know, it doesnt mater how much you bet, but the irs steps into the mater when you win $600 while betting on racing. they jump in when you win $1200 on the slots.

what is important, you get to right-off all your winnings. so, unless you want to report a net profit for the year (in racing), you should NOT be paying a tax to the irs for that year in which you report.

and you can have a net profit.

[Dancer's Image]

That is very interesting, Chickenhead....I've never used Expressbet so I don't know about them. But I have lived in Vegas for about 15 years, and it is 600-1 here for W-2 forms. Something seems very strange about this. Also in Vegas, they do not withhold anything. Could this be an Expressbet scam?

[Valuist]

No, that's no scam. I believe that is Federal law. In LV, I believe they can't take any state withholding.

[takeout]

from xpressbet website:
Winnings of more than $5,000 from a wagering transaction are subject to federal income tax withholding and XpressBet must withhold 25% of the payoff.

Isn’t federal withholding 28%?

[JackS]

The IRS rule used to be 300-1 with no mention of $1 versus $2 bets.
I've have always assumed that this rule was in place long before $1 bets were allowed anywhere and that the IRS has always held the $2 bet as the basis of their takouts.

[schweitz]

The IRS rule is this: anything over $600 AND 300 to 1 odds = W-2 must be filled out, $5000 and over AND 300 to 1 odds = 28% withheld from your payout

Gambling losses can be written off up to amount of winnings---but only if you itemize on Schedule A and even then you don't get a dollar for dollar writeoff.

[schweitz]

To answer the original question--you can cash a $1 exotic ticket up to $599 and there is no tax paperwork to fill out at the track.

[hurrikane]

you are correct gt.

got my qulifiers wrong

300-1 and 600.00