Tax Question

[cal828]

Originally Posted by Scav

Here is the thing though that is so sketchy, less then 2% of people in their respective cities get audited, and lets just say that 5k doesn't get reported, you are probably on the hook for 1k, and that is that, they won't even audit you, they will send you a letter saying "Um you forgot to claim this so you owe us this"

I would say with 100% certainity that people on here are not claiming EVERY ticket they cashed at the racetrack, which according to tax code, you are suppose to do.

Unless you making over 250k, where your chance of getting audited is alot larger....well, you get the point

Just curious. Do betting services like youbet and others report your total winnings on a 1099 to the IRS or do they just report single winnings over $600?

[Bigsmc]

Originally Posted by cal828

Just curious. Do betting services like youbet and others report your total winnings on a 1099 to the IRS or do they just report single winnings over $600?

Only the W2G's

[Danzig]

saw turbo tax mentioned above....i highly recommend. i did my taxes last monday evening and already got state back, and will have (if it isn't there already) federal any day now....direct deposit baby.
it takes longer the first time you do it...but every year after that, it retrieves all your info, so no re-entering stuff.

i don't make a red cent, so sorry if it sounds like a commercial...but seriously, give it a try.

[Port Conway Lane]

Just to update and for those of you who may be as ignorant as I was of the tax laws I was assessed an interest penalty from the state of Maryland for $81 because I did not report the contest winnings. I was required to report those winnings when I received the check and pay the state an estimated tax. This could apply to gambling winnings as well.
Freakin thieves.

[Holland Hacker]

Originally Posted by Port Conway Lane

Just to update and for those of you who may be as ignorant as I was of the tax laws I was assessed an interest penalty from the state of Maryland for $81 because I did not report the contest winnings. I was required to report those winnings when I received the check and pay the state an estimated tax. This could apply to gambling winnings as well.
Freakin thieves.

Generally speaking estimated taxes are due on taxes and should be equal to 100% (or 150% for High AGI taxpayers) of prior year tax or 90% of your current year tax liability. Assuming you had other income in Maryland in last year and had at least an amount equal to or greater than last years tax paid in through withholodings you shouldn't owe the underpayment penalty. If you didn't file in Maryland in a prior year I'm not sure if you can rely on the prior year safe harbor. You can check the requirments found in the instructions.

Out of curiosity do you live in Maryland? I'm trying to figure out why Maryland is entitled to any tax. What if anything did the terms & conditions of the contest say with respect to taxes?

[Port Conway Lane]

Any income I earn is taxed by Maryland. They ask for my agi on my federal form and because the contest winnings are part of the agi Maryland wants their cut AND wants it (estimated tax on the winnings)within one quarter after I cash the check. I failed to do so and now they hit me with the interest penalty.
Unfortunately my employer took out the bare minimum in witholding so it was not enough to cover the $5,000.

While I'm typing if anyone is interested in a slew of Blood Horse and racing forms from the early to mid 80's I'm moving and trashing them within two weeks. PM me if interested, I live in Laurel 4 miles south of the track.

[Holland Hacker]

Here is a blurb from Marylands webite for estianted taxes on gambling winnings:

Gambling Winnings
If you receive winnings from Maryland lottery games, racetrack betting or gambling, you must pay income tax on the prize money. This would apply if you were either a resident of Maryland or a nonresident.

If your winnings total more than $5,000, Maryland income taxes will automatically be withheld from your newfound income.

If your prize money totals between $500 and $5,000, you must file Maryland Form 502D and pay the tax on that income within 60 days from the time you receive the prize money.

You should calculate the amount of tax due following the instructions included with Form 502D. You can claim a credit for taxes paid with Form 502D when you file your annual income tax return.

If you win less than $500, you don't have to file Form 502D, but you still must report the winnings and pay tax on it when you file your annual state income tax return.

If you fail to pay the required estimated taxes due or report income, you could be subject to penalty and interest charges.

It appears as though you are correct that you owe the underpayment penalty. I did not see the typical safe harbor provisions based on prior years that most other states have in Maryland, and I thought I had it rough in Nj wih taxes.