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Originally Posted by booner
Not that I have cashed one lately, but a friend asked me a question last night and I couldn't answer.
If you play, say, a $1 Pick 4 twice. It pays $1000 for a $1. Do you pay the 28% (or whatever the off-the-top tax is) on each ticket or just once since it was the same wager?
And is my explanation of his question as clear as mud?
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You don't "pay" anything--"paying" (actually, withholding) kicks in at $5000.
Both tickets would reported as income to the IRS. What that means eventually as to "paying" you don't figure out until the next year when doing your taxes. It could be nothing (if you have offsetting losses), or it could be as much as whatever your marginal tax rate would require. If you anticipate something extreme, there are always "cashers" to be found.