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Scale down bets to avoid forms

Jun 29, 2004 3:12 AM

One more reason to prorate your wagers if you can is to avoid the inconvenience of filling out those little tax forms. Let’s take the old favorite way ticket, four groups of two, and compute all the payouts for each catch.

This ticket is commonly played for either $1 per way for a $15 ticket, or 50 cents per way for a $7.50 ticket. Incidentally, this ticket is commonly referred to as the "four twos ticket" or the "four deuces ticket." If you will refer to the first two columns of the chart below, you will see all the pay outs for $1 per way and 50 cents per way. Note that if you play for $1.00 per way, you will fill out a tax form for a 2-2-2-0 catch, a 2-2-2-1 catch, and of course for a solid eight. Playing for 50 cents per way eliminates one of these taxable catches but creates a new problem. You will have to fill out a tax form now on the 2-2-2-1 even though it only pays $1,826.50!

PRICE PER WAY

1.00

.50

75

40

TICKET PRICE

15.00

7.50

11.25

6.00

1 1 0 0

1.00

0.50

0.75

0.40

1 1 1 0

4.00

2.00

3.00

1.60

1 1 1 1

10.00

5.00

7.50

4.00

2 0 0 0

15.00

7.50

11.25

6.00

2 1 0 0

20.00

10.00

15.00

8.00

2 1 1 0

27.00

13.50

20.25

10.80

2 1 1 1

46.00

23.00

34.50

18.40

2 2 0 0

149.00

74.50

111.75

59.60

2 2 1 0

263.00

131.50

197.25

105.20

2 2 1 1

462.00

231.00

346.50

184.80

2 2 2 0

1973.00

986.50

1479.75

789.20

2 2 2 1

3653.00

1826.50

2739.75

1461.20

2 2 2 2

26658.00

13329.00

19993.50

10663.20

Column 3 is a pro-rated ticket played at 75 cents per way. This accomplishes the same thing as playing for 50 cents per way, (eliminating one taxable catch), but it has the advantage of not cutting down the other pay outs so much. Column four is the same ticket played for 40 cents per way, and this eliminates all the taxable catches except for the solid 8. At the same time, the 7 out of 8 is just about as close to the taxable limit as you can get with this ticket.

The majority of casinos have set their six spots and seven out of eights to pay $1,480 just to avoid the tax headaches, but there are a some casinos that pay $1,490, $1,495, or even a flat $1,500 on their six spots. These pay outs are fine on a straight six spot, but if you are playing way sixes, for example a ten way six, you might consider pro-rating your wager if the casino will let you. A ten way six using 5 groups of three will normally have some small catches on it any time you hit a solid six. You might be in the situation where you’ll have to fill out a tax form for a winner of $1,511, just a few dollars over the limit, due to that particular casino’s slightly higher than standard pay out. If you’re playing a way six at one of these games, you might ask them if you could play for 90 cents a way or so, just to be on the safe side! That way you’ll win almost as much for a solid six, while at the same time avoiding the tax form inconvenience.

According to IRS regulations, ALL gaming winnings are taxable income, even if you win only a dollar or two. Keno games are required to report only NET winnings of $1,500 or more. The Keno player is still liable to pay taxes on smaller winnings, even though no report is made.

That’s it for this week, Good Luck! I’ll see you in line!