Taxes

diigiitsmatter

Hope I'm not crossing the line here. But just curious. How do you cover your taxes from your winnings with that 3 letter organization? Are those funds taken out automatically when you request a payout?

bmehmet

diigiitsmatter

Everyone has to report and pay their own taxes like with any income.

Federal Taxes:

The IRS requires 24% to be withheld from winnings over $5,000 immediately.
The actual tax rate can be higher depending on your total income. Lottery winnings are taxed as ordinary income, meaning you could owe up to 37% if your total income (including winnings) places you in the highest tax bracket.

State Taxes:

Some states do not tax lottery winnings (e.g., Florida, Texas, California).
Others have state tax rates ranging from 2% to 10% or more.
If you win in a state with no tax but live in a state that does tax winnings, you might still owe state taxes.

mithod0833

Now Thats a touchy subject,

saying that i know a guy who collected $2000 and he said he didn't get a 1099 or any other form but since he was dealing with crypto that when he sold it he would just report it that way. I do know some of the new tax programs ask about crypto investments.

Saying that i do not know if he reported it or not, wasn't gonna pry and ask him the outcome.
But as soon as David finishes the new coding and i hit one of those 2-3 numbers for more than $37.50 or $75 i guess i will cross that bridge.

But i am sure others on here have been down that road and should know more.

erikm

bmehmet but, isnt it NET taxes for the year. Example. If someone wins +20k in lotto wins the first 6 months of the year, then the next 6 months manages to lose -$20k. They are NET ZERO for the year and do not need to claim a dime?

bmehmet

erikm

Yes, you can DEDUCT your loses upto the amount of your wins as long as you have a record of it. You must itemize it on the 1040 form.

For example, if you won $5,000 but lost $7,000, you can only deduct $5,000. The remaining $2,000 is not deductible. Which means you won't owe any taxes on the winnings.

This also applies to all forms of gambling.