Winning amounts that trigger federal tax forms W-2G

Hello...1st time poster but long time horse player based in New York...I normally play exacta's and triples and am aware of tax forms being triggered on Tri's etc when the payout is over $600.00 And then actual witholding ( 20 or 25%) is taken out if the payout is I believe $5k or above ( correct me if I'm wrong )

But with the new betting formats now available I am curious as to what triggers a tax form...for example, I received in January Two Form W-2G "Certain Gambling Winnings" from a pick 3 bet I made...I made two $1.00 Pick 3 bets and the payout was for $344.00 for each $1.00 ticket I had...I can't recall how much I bet on that specific bet 3 but probably not much..Maybe $20 or so....

Did it trigger a year end tax form due to they combined the 2 winning tickets of $344.00 each to arrive at over $600?

If that is so what if I bet a $50.00 exacta 6-2 and hit and the payoff is $200.00 for a $1.00 bet? Do they then take $200.00 and times it by $50.00 ( the amount of my wager ) to arrive at $10k and send me tax forms for that amount at the end of the year?

Another example...What if I bet $1k to win on the 1 horse and he wins and pays $14.60....I would then have $14.60 x's 500 times for a total of $7,300.00 Will that also trigger a tax form at the end of the year?

I do all my wagering online through the NYRA Rewards Program but if one was at the track and made a $1k bet to win on a horse and it paid $14.60 would the track pay you all in cash $7,300.00 or would you be required to fill out tax form right there on the spot?

How about 50 cent tri's now available...what amount on a 50 cent tri will trigger a tax form?

Or a 10 cent superfecta? what amount of winnings on a 10 cent super would trigger a tax amount? And what if you have ( 5 ) 10 cent super winning tickets and each 10 cent super paid off at $300.00 for a total of $3k?

I'm just now confused about the amounts involved and multiple winning tickets which will trigger tax reporting....I'm asking mostly due to my planning to increase the amount of my wagers so I want to understand what amounts trigger tax reporting and do they combine multiple winning tickets and if the combined amount totals over $600 does it then automatically trigger a tax form?

Any help from anyone here will be most appreciated...I'm sure not sure any longer how they calculate what requires a tax form and what doesn't.

Thanks

ok here we go...first off, your first paragraph is spot on....2nd paragraph-what are the 'new' betting formats now available?..and then getting a w-2g on those bets is pure bullshit....like u previously stated it's 600-1 and then u start paying taxes?....lil confused why u got those forms....paragraph 3:they shouldn't have...paragraph 4:they better not..fucking thieves that they already are...paragraph 5: no, it shouldn't.....paragraph 6: yes they would pay u the whole $7300...paragraph 7: 50 cents would have to be a $1200 win or more....paragraph 8:make all yer future supers 10 cents.... i believe it would take a $6k payout on ten cents to pay taxes on that one....in summation, u seem to have a grasp on the whole deal...just super confused on why you would be mailed those pick 3 forms...that's pure b.s.....cheers

First off, thanks for replying..Your post was indeed helpful.....

My saying new betting formats I meant to imply the 50 cent trifecta wagers and also the 10 cent superfecta's.....even though I know the dime supers have been around a bit...poor wording choice by me saying " new betting formats"

I also made a mistake after taking a closer look at the 2 tax forms I received...the amounts are correct...each one is for $344.00 but I thought they were pick 3 wagers but they say ex for exacta.....so evidently I had 2 $1.00 base amount wagers on an exacta that must have paid $688.00 for $2.00 and they combined my two $1.00 bets of $344.00 each for a total winning of $ 688.00. So I am assuming that if you hit an exacta that pays over $600 on a $2.00 ticket you are going to trigger a tax form....but if you only bet that exacta for a $1.00 you would receive $344.00 and no trigger...but if you make multiple $1.00 wagers like I did ( 2 )$1.00 exacta bets that total over $600 then I take it you will get a tax form....?!

So even though I disagree with what they did if an exacta pays over $600 based on a $2.00 bet then you will trigger a tax form..( if you made at least 2 $1.00 bets on it )...since all of my wagers are done through NYRA rewards program I set my base wagers to default at $1.00....I just hit the "repeat" button if I really like the bet and want to bet more than a $1.00 ( also keeping in mind taxes )

So this leads me to another situation..

Lets say you make a $20.00 exacta bet on 2 longshots you like in the Derby and your two bombs hit first and second and the $2.00 pay-off for the exacta is $1,800.00...or $900 pay off for each $1.00 based wager made........ in this case would be 20 times.

Would you then trigger (20 ) W-2G tax forms with each tax form showing your exacta hit of $900.00? Are you now on the hook tax wise for $18k which is the amount your account would get credited?

I've been around a long time but always in the OTB parlors where things were different...I embrace and enjoy doing all my wagering from the comfort of home online through the NYRA but am now wondering how they figure all the tax stuff....

Thanks again!

One other example:

You love a key horse so you wheel it with ALL-ALL in the next two races for pick 3 wagers...let's say there are 8 horses in those other two races so your $1.00 Pick 3 wager cost is $64.00 ( 1x8x8 )....now since you love your key horse and you feel the chances of longshots coming in the next two races are very possible so you make( 5 )Pk 3 wagers on it...all based on a $1.00...so you bet $64.00 x's 5 for a total wager of $320.00

Your key horse wins and let's say pays $9.60...the next race a bomb hits and pays $32.00 and then the last leg of your pk 3 another bomb hits and pays $28.00....The Pk 3 payoff for a $1.00 gets posted and the pay off is $1,500.00

So you have $1,500.00 (5 ) times for a total of $7,500.00

Are you now going to get W-2G forms in the mail at the end of the year for hitting the above pick3?

I'm confused.

TomTom said:

One other example:

You love a key horse so you wheel it with ALL-ALL in the next two races for pick 3 wagers...let's say there are 8 horses in those other two races so your $1.00 Pick 3 wager cost is $64.00 ( 1x8x8 )....now since you love your key horse and you feel the chances of longshots coming in the next two races are very possible so you make( 5 )Pk 3 wagers on it...all based on a $1.00...so you bet $64.00 x's 5 for a total wager of $320.00

Your key horse wins and let's say pays $9.60...the next race a bomb hits and pays $32.00 and then the last leg of your pk 3 another bomb hits and pays $28.00....The Pk 3 payoff for a $1.00 gets posted and the pay off is $1,500.00

So you have $1,500.00 (5 ) times for a total of $7,500.00

Are you now going to get W-2G forms in the mail at the end of the year for hitting the above pick3?

I'm confused.

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i am trying my damnedest to follow all yer phrasing.....ok so you would get 5 separate w-2g's for $1500 each....not one for $7500...good thing about the nyra accounts is that they track every bet and come end of the year accounting...you don't have to go slumming on the floor of otb/belmont/spa/big a for tix....everything is computerized and you can ask for a printout to hand your accountant....and prove your losses to the irs.....as for your derby example on the exacta...you should only be charged taxes on a bet by bet case....ie. paying taxes on 20 different tix instead of one large ticket...after all you did play 20 $1 exactas...not a $20 exacta..cheers

It's 300-1, and over $600.00 for W2G, and over $5000 for withholding, but all tickets of same bet type are supposed to be combined.

It's easy to determine, just follow these steps:

1.) Is the wager over 300-1? If yes go to step 2, if no not reported
2.) Is the combined payout for all bets of that type over $600? If yes go to step 3, If no, not reported
3.) Is the combined payout for all bets of that type over $600, but less than $4,999.99? If yes, than W2G, IF no step 4
4.) Is the combined payouts for all bets of that type over $5000.00? If yes than W2G and withholding of federal taxes and state taxes if your state has them


That is the disadvantage of using an ADW site like NYRA instead of having actual physical tickets... Ex: Pick 3 pays $344 for $1, and you have two physical tickets, you can cash them at SAM machine and walk away with voucher for $688 and no tax repercussions. If you bet on NYRA account, the computer system will aggregate your winnings for that bet and because it's over $600 AND 300-1 the computer will generate a W2G. Computer betting accounts make it harder to beat the system...

ICAUITUA said:

That is the disadvantage of using an ADW site like NYRA instead of having actual physical tickets... Ex: Pick 3 pays $344 for $1, and you have two physical tickets, you can cash them at SAM machine and walk away with voucher for $688 and no tax repercussions. If you bet on NYRA account, the computer system will aggregate your winnings for that bet and because it's over $600 AND 300-1 the computer will generate a W2G. Computer betting accounts make it harder to beat the system...

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Doesn't seem fair but I guess it will force me to adjust my online wagering amounts placed through NYRA....

While I'm not much of a computer person I sure have embraced their online wagering...but if certain winning wagers placed at the track don't require tax reporting I sure wish the same was done online.

I sure appreciate your helping me out with this dilemma.

Thanks!

I am a tax preparer as well as a horse and dog player and i would like to add a few items to this issue. Please realize that the IRS considers all gambling winnings as taxable income whether you get a W2-G or not. You can,however,deduct all losses to the extent of your winnings to minimize that income. Additionally, you can use any gambling losses(lottery tickets,scratch offs,etc.) against your pari-mutuel winnings. You must be able to use itemized deductions on your tax return in order to do this. See Publication 17 at IRS.gov for more details. Also see Instructions for Forms W2-G and 5754 if you play in a group and wish to split the tax liability. Be aware also that some states do not allow you to deduct losses. To clarify one of your other questions let me state that W2-G forms are generated on payoffs of 300-1. This occurs with exotic wagers. There is no W2-G for straight wagers( win, place,show) no matter how large the wager unless the horse goes off at 300-1. You might get that price in a hypothetical 50 horse field. Your $344 ticket was counted twice due to the "bundling law" which was in effect in some states before internet wagering. This also happens occasionally when, for example, a horse you are alive to in a pick 4 scratches and you are forced to take the favorite as a substitute. If you already had the favorite as one of your picks and he wins then you get paid twice on the same wager. This will generate a W2-G on the payoff if the payoff is more than 300-1. I hope this helps your understanding of the tax laws regarding W2-Gs and if you have any other questions please post them here or call me at Liberty Tax Service in Dubuque, Iowa at (563)556-6061. My available hours are 9-5 on Mondays,Thursdays Fridays and Saturdays. Good luck in your future wagering.

I forgot to mention my name is Mike at the office.

pic6doc said:

I am a tax preparer as well as a horse and dog player and i would like to add a few items to this issue. .

Click to expand...

Hi Mike and thanks for taking the time to help out which you did very much so....Appreciate it!

I lived in South Florida for close to 20 years and enjoyed betting the greyhounds very much....Lived in Ft Lauderdale and my favorite were Hollywood, Biscayne and Flagler.....

Right before I moved my business from Lauderdale to West Palm Beach I took a girlfriend on her birthday to Flagler....This was a long time ago but I noticed a dog in a race who I had seen race at a track in Plainfield, CT while visiting that area about a year earlier...odds were like 30-1 and stayed there...I was up on the night about $500.00 so took a shot and played a tri wheel with the dog on top and then ALL-ALL...$84.00 ticket if I recall correctly....

The dog wires the field and I'm telling my g/f the tri is going to be huge....Came back a little over $14k and we went crazy...turned out I had the only winning tri ticket and that was the pool for that race back then....After filling out required forms I was paid in cash......I tipped a number of people then bought the bar a couple of rounds and a police officer I knew who moonlighted as security at night for the track comes over and tells me if I want he will escort us to my car in the parking lot as I was saying bye to everyone.

So I tell my girl let's go and she still has in her hand a voucher for $20.00 and change...she hands it to me and I stop at a self serv betting machine, put the voucher in and for the next race I hit Trifecta Straight-Quick Pk- and it gives me 658 straight tri tickets.

We leave and the next morning I look at the results and that race came in 6-5-8- and the tri paid $475. and change...just unreal...so I that was another $4,750.00 I collected when I went back a few nights later....Best night I ever had and nothing has topped it since.

All these years later I keep thinking of a certain dog who raced down there..His name was Derrick's Cadillac and my girlfiend thought that was the coolest name ever for a greyhound.

After relocating to West Palm Beach I started going to Palm Beach Kennel Club....when I first got in the area it wasn't much of anything but over time it grew and got better...use to bet dogs out of an outfit called Pat Collins ( might have the spelling wrong )..The had their dogs name always start with Pat C....

Then there was a dog that just refused to lose..He's My Man was his name.....
What a bad ass he was..

I miss Southeast Florida and if my health will hold out now that I am getting older I plan on moving back down there as I am fed up with cold, slush and snow even though we have been having a very mild winter so far here in NY.

Thanks again and good luck to you!

Your $344 ticket was counted twice due to the "bundling law" which was in effect in some states before internet wagering. This also happens occasionally when, for example, a horse you are alive to in a pick 4 scratches and you are forced to take the favorite as a substitute. If you already had the favorite as one of your picks and he wins then you get paid twice on the same wager. This will generate a W2-G on the payoff if the payoff is more than 300-1

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No unliked bet types are to be "bundled" UNLESS IT IS AN IDENTICAL WAGER. IE: if you say repeat the wager, and it hits for over $300. on the $1 wager than YES it is "bundled" as a $2 wager and will trigger a W2G... however, if you bet $1 wager 2,3,4,5 exacta box and then another $1 exacta wheel 2 WITH 3,4,5 these are not identical wagers and should not be "bundled" in a ADW wagering system if the exacta pays over $300.00 but less than $600.

I have seen in cases where a selected horse is scratched in a Pick 3 or Pick 4 they will sub the favorite, but if you already have the favorite on your ticket for that race.....you would not get paid double.......think the ruling is only to replace not double up.


True you can deduct your gambling wagers against and up to your gambling winnings.....but you better have documented and logged entries and actual proof if you ever get an audit by the IRS..........

ADW betting systems are scary...this year I joined into a Pick 6 pool for minimum amount to go after the NYRA Pick 6.
Well ... the selectors played two tickets for all the money in the pool and it caught the pick 6 and had 18 or 19 tickets 5 of 6.

My share...... gross was around $60.00. Was awarded $44. and change, into my account. But the killer was I got a W2g because the pick 6 paid over $600. and I was a player in that pool. Was not worth the experience.

I know a bettor that played a 10 cent superfecta box and got $383.50 ...free and clear...Superfecta for $1 payout was $3,835.00.

You can put all the money you want on a horse to win or place or show and that 99.7888% of the time will not trigger a W2g

Hope this helps.

Helpful and interesting too..

Thanks gremlin lad!

wow. i just learned alot what to do and not to do when trying to beat the tax crap.

In many cases there are going to be instances when no matter what you won't be able to beat the tax at the track....but I'm going to give you the best advise to follow as a general rule of thmb

"Always make your wagers, especially if the pay-out could be huge in the lowest increments possible"....Always better to have 4 tickets at $500ea than one ticket at $2000 as an example. Sometimes this can't be avoided, but if you can ask for it accordingly. This has saved me hundreds of times at the track over the years. With the addition of the .10 Superfecta only a moron would go up and ask for a $1.00 Superfecta. Just buy the same ticket 10 times if necessary. A $1 Superfecta paying $3,000 or 10-.10 Superfecta's paying $300ea. I'm sure you get my drift. This is just one example of potentially many.

Yours in Winners
BernieV