Betting exotics and the TAX law, or signers

[whobet]

Betting exotics and the TAX law, or signers
Since TINMAN, didn't know this,
there are probably alot more of you that don't know how to avoid signers.

When they wrote the TAX law, all bets were $2,
and the tax law says, any bet that pays more the $600 is subject to with-holding,
or as horse players call it, "A Signer".

Also, back then, all payoffs were rounded to 20 cents, that's called the breakage,
the Race Track likes this, they make more money from you.

We seldom bet with cash any more, we have vouchers, internet and such,
very seldom is dollar bills transfered back and forth like in the old days.

How many remember the $2 windows, you don't see that any more. At the $2 windows
you could only bet $2.

Well any way I digress, some wise person, came up with the $1 bet, and today
we have $0.10, $0.25 and $0.50 bets, and even co-mingle with Canada.

So, you say, what does this have to do with signers.
If you bet a $1 EXACTA, it is not a signer, unless it pays $600 or more.
So, if you want to bet a $2 EXACTA, you should always bet two $1 bets,
thus the tax man won't get you unless the $2 bet would pay more then $1200.

That is why you should never bet a $2 exotic bet. Always bet two $1 bets.

[straymar]

If you keep a good ledger with column headings of Date, Total Bet, Total Gross Collect, and Federal Tax Witheld and keep it up to date, you don't have to worry about the tax man..........

You will get audited for sure if your total gambling winnings is the total of your signers. That sends up a red flag.

[straymar]

Then of course, you need to add a schedule C to your tax return and treat your "gambling" as a business and list your occupation as "Professional Systems Player" and you will have no problem with IRS.

I've been doing this for YEARS and never been audited.

[traynor]

Then of course, you need to add a schedule C to your tax return and treat your "gambling" as a business and list your occupation as "Professional Systems Player" and you will have no problem with IRS.

I've been doing this for YEARS and never been audited.

Pay attention, folks. This is some seriously good advice that everyone who wagers more than $1 at a time should heed. The ONLY reason not to keep accurate records is that you are losing, and can't admit it. If you are winning, you are required by law to maintain accurate records for tax purposes.

[Sailwolf]

Then of course, you need to add a schedule C to your tax return and treat your "gambling" as a business and list your occupation as "Professional Systems Player" and you will have no problem with IRS.

I've been doing this for YEARS and never been audited.

Only if you spend more time in this activity then other activities including your "day" job.

[traynor]

Only if you spend more time in this activity then other activities including your "day" job.

My favorite advertisement was the one Ken Uston ran in Stanley Roberts' old Gambling Times magazine; the headline was, "You don't have to work if you know how to play."

[BlueShoe]

For those of us that play superfectas,the ten cent bet,where offered,can be a rare tax break.When they were first offered,was opposed to them because of the very real possibility of being shut out behind some nitwit betting large numbers of combinations at a very slow rate.However,have had a change of opinion because of the tax break.A crony of mine is a large bettor and loves the superfectas.He makes dime bets and then just keeps hitting the repeat button on the Sam for as many times as he wishes to invest.A really big super that pays 5 thou for a dollar pays 5 hundred for a dime,under the tax threshold.This is a break for the little player that loses all year to make a decent score without worrying about taxes.Cant help but wonder just how long it will be before the #%^> IRSS becomes aware of this and closes the loophole.

[Maverick58034]

But do Dime Supers have a negative effect on payout?

At Fairmount Park, we usually have 2 Superfecta races (dont ask me). It always seemed that those supers payed good (a few hundred to a few thousand... depending on odds obviously). However, I noticed that they have been paying less and less lately. Maybe this is just a fluke and they would have payed lower anyways, but I'm not sure, as it seems that most of the money is from our local pools (I'm not sure who simulcasts us, or who plays us), and that the locals would prefer to play alot of horses for a dime than only a few for a buck.

[KingChas]

So, you say, what does this have to do with signers.
If you bet a $1 EXACTA, it is not a signer, unless it pays $600 or more.
So, if you want to bet a $2 EXACTA, you should always bet two $1 bets,
thus the tax man won't get you unless the $2 bet would pay more then $1200.

That is why you should never bet a $2 exotic bet. Always bet two $1 bets.

:confused: :confused: :confused:

600 to $1 = 1200 to $2

You lost me. Sign on any $/exotic combo that pays 600 to 1 or over.
That's that.What am I missing here?

[KingChas]

Are you assuming if you play a $2 exacta and it pays $650 you sign?

No Sir. ;)

[BlueShoe]

Just my opinion,but dime supers may be decreasing payoffs on the huge priced ones but helping the shorter priced logical ones.Or dime supers might have little or no impact on prices.Smaller bettors trying for a big score tend to bet all kinds of wacky combinations.Have often been behind players just punching in random numbers just as fast as they can push the buttons.When you can play a dime super for,say,$3.60,a player may get a bit wild.At a dollar a bet,if you must bet $36,you likely will tighten up and play logical combinations.My preference is to play dimes,and hit the repeat key as often as needed,just in case it hits and the payoff goes over that $600 mark for a buck.

[tahoesid]

It's anything over 300 to 1 on a $1 bet that pays $602 or more. Was figured when there were only $2 bets around. Slots its any $1200 payout or better.

[thebeacondeacon]

There are probably others on this board who are closer to this issue than I am.

However, I believe the $1 vs. $2 exacta issue turns on the fact that a "signer", as the IRS W2-G form is known, is triggered by winning a wager that pays 300-1 or more and nets the horse racing bettor $600 or more.

Therefore, if one bets a $1 exacta that pays 300-1, the payoff is only $301, where the return on the same bet at $2 is $602. The domestic racebook does not report the former over the bettor's signature, only the latter.

So, it's really a two part test, the odds of the payoff and the amount. In addition, a 300-1 win that nets a $5,000 payoff or more is automatically subject to withholding. Amounts below that are only reported.

Different racebooks seem to treat the 300-1 issue differently, as well. I had conversations on Tuesday with both eBet and Xpressbet. eBet said they base the 300-1 requirement on the unit bet, where Xpressbet ties it to the total amount of the ticket. Therefore, a 300-1 $2 superfecta at eBet that pays $600, let's say, triggers a signer, but not at Xpressbet, if it is won on say a $24 boxed ticket. In that case, the Xpressbet signer would kick in if the superfecta paid $7,200 or more.

Apparently the IRS regulations apply the 300-1 threshold to a "single ticket", and different establishments interpret this phrase differently.

thebeacondeacon