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Post by big18741 on Nov 18, 2019 21:09:05 GMT -5
George
Are you familiar with the Pa/Fed laws regarding taxes on sports betting? Do they tax any net profit for the year or is there an amount where they start to tax winnings?
I've done some of my wagering in an online Parx account since September. Can any net profit there for 2019(tracked to the penny) be offset by an equal amount of net losses over the counter that weren't done on account(not tracked by the state/fed) during 2019?
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gam
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Post by gam on Nov 19, 2019 11:57:37 GMT -5
Big, just took a quick look at the PA instructions to the income return but, other than that, I'm no more familiar with the rules than anyone here that has had to claim gambling income. Basically, all net gains from gambling is income. You can combine wins and losses across various forms of gambling (although there may be exceptions for lotteries) and you cannot deduct costs associated with gambling. You are supposed to have documentation of your wins/losses (a ledger, the tickets, etc). Obviously, the more you do online, the more documentation that'll be built in for you. To answer your question, you should be able to combine the Parx account wagers with all other wagers and net it out, the question is whether you have the backing documentation. Of course, that'll be an issue only if the sum you place on your return is questioned.
Maybe some of the guys that have hot some nice paydays in the Tourneys can chime in.
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gam
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Post by gam on Nov 19, 2019 14:57:26 GMT -5
And just another thought, the above should be pretty similar for the Federal income tax.
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Post by big18741 on Nov 20, 2019 6:18:43 GMT -5
Thanks
I hadn't given it much thought until taking some payouts of late. Curious as to whether they issue a w2g to account holders. Guess I'll find out late January.
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Post by elkurzhal on Nov 20, 2019 8:24:52 GMT -5
ADW's only issue W-2g's for individual wagers that meet the tax rules requiring it. Wagers that pay off at odds of 300-1 and have a payout of $600 or more. The 300-1 interpretation was changed a couple years ago from being the base price of a ticket to the total cost of the wager. They will not issue a W2g for withdrawing more than you deposited.
I have never heard of an ADW issuing a 1099, but contest sites do. This does create some problems as 1099 income isn't treated like gambling income with the loss offset. I did "reclassify" my showdown winnings a lot of years ago as gambling income and deducted losses from it. Basically included a letter saying it was gambling and included it in the amount of my deduction.
Overall - you basically need to keep a log of all wagering and be able to support the information in your return during an audit. You are supposed to report all winnings and deduct all losses, but functionally, it acceptable to report net winning if they exceed the w2g amount, or just the w2g amount and deduct the losses appropriately to get you to your net winnings amount or 0.
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shoes
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Post by shoes on Nov 20, 2019 18:16:36 GMT -5
Something else I would mention as regards Federal taxes: You can deduct documented losses from winnings BUT ONLY IF you itemize deductions. With the increase in the standard deduction far fewer taxpayers itemize. This sets up an unfair circumstance, if you do not itemize. For example you win 10,000 as reported on W2Gs and can document 8,000 in losses. If you itemize you can deduct the 8,000 in losses and pay taxes on the 2,000 difference but if you do not have sufficient deductions to itemize, then you are taxed on the full 10,000. Or at least this was the case 2 years ago, I am not aware that this unfair treatment has changed since then.
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Post by elkurzhal on Nov 20, 2019 20:24:44 GMT -5
Shoes - that is still the case. It gets even worse if you run into AMT issues...
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