Have you heard about the woman who works at the cheese factory but was on vacation last week and didn’t put her dollar in. Now, they’ve got a dilemma, do they let her share in the earnings or do they leave her to suffer, while they have live a little easier? easierhttp://www.postcrescent.com/apps/pbcs.dll/article?AID=/20060807/APC0101/60807046/1003/APC01
Urban Myth-ALL gambling winnings are subject federal income tax. I don’t know for sure about state income taxes. A few states do not have an income tax-Florida and Texas come to mind- but I really doubt any state with an income tax gives a pass on gambling winnings.
You will usually sign a W2-G when the winnings exceed $600 and the payout is 300 times the wager. You get a copy and the IRS gets a copy, so if you fail to report that income on your tax return, you can expect a knock on your door-(Actually, a letter demanding payment of the additional tax due). If the payout less the amount wagered is $5000 or more, 25% of the payout is withheld for federal taxes. That’s the general rule, sometimes 28% or more may be withheld.
Most people assume that gambling winnings only have to be reported if a W2-G is issued. That is not true. Again, ALL gambling winnings are reportable income, but the government relies on your honest reporting when a W2-G is not issued.
Well, at least those who don’t gamble are OK.
That woman could have left a buck to be put in and then she wouldn’t be “suffering”. I’d not include her if it was me.