Scratch off winnings

[schristianlpn]

I won $35,000 on a scratch off. They held $8400 for federal taxes and $2275 for state taxes. I don’t have any other taxable income for the past year. Would I get any of that back when I file my taxes for 2020 or would I owe? 

[MissMCJ]

Do you have proof of gambling spending that you can  use to offset the winnings?  You can submit up to $35,000 in gambling expenses, as long as you can prove that you spent the money.  With no other earnngs, you will probably break about even on the taxes owed to federal and state.

[xmasbaby0]

We do not know since you have not provided any other information regarding your filing status, etc. etc. etc.  Prepare a 2020 tax return to find out.

[NCperson]

@MissMCJ - can you show us your math on breakeven? I came up with a very different answer and we owe it to those asking to back up our responses; it's only fair. 

If I assume single filing under the age of 65 and absolutely nothing else, then the refund would be about $885.  That takes the $35k reduced for the standard deduction and apply the tax bracket table (12% marginal rate over $9875 and 10% under $9875)

@MissMCJ - also, I can't figure out where to put any gambling losses on the tax return so I didn't include an estimate for them in the above.  Where do they go? 

HOWEVER, @schristianlpn  how are you otherwise living? if you have social security and that is normally not taxable, it may be in this instance and would eat up any potential refund.  

please take @xmasbaby0's advise, just do a tax return.  at your income level, you can probably do it for free at a number of websites authorized by the IRS.

[xmasbaby0]

@schristianlpn  

Gambling

To enter the W-2G  or other documents For your Gambling winnings--Go to Federal>Wages & Income>Less Common Income>Gambling Winnings

You can enter your winnings, and then keep clicking through the interview to enter gambling losses.

https://www.irs.gov/help/ita/how-do-i-claim-my-gambling-winnings-and-or-losses

Gambling winnings are taxable income.  Losses are an itemized deduction.  If you do not have enough itemized deductions to exceed your standard deduction, your losses will have no effect.

https://blog.turbotax.intuit.com/income-and-investments/how-are-gambling-winnings-taxed-8891/

https://ttlc.intuit.com/questions/1900352-can-i-deduct-my-gambling-losses

2020 Standard Deduction Amounts

Single $12,400   (+ $1650 65 or older)

Married Filing Separate  $12,400   (+ $1300 if 65 or older)

Married Filing Jointly $24,800   (+ $1300 for each spouse 65 or older)

Head of Household $18,650  (+ $1650 for 65 or older)

You said you had no other "taxable income" but we do not know exactly what you meant by that.

As @NCperson  mentioned, if you have Social Security income, your SS might become taxable if you have gambling income:

TAX ON SOCIAL SECURITY

Up to 85% of your Social Security benefits can be taxable on your federal tax return.  There is no age limit for having to pay taxes on Social Security benefits if you have other sources of income along with the SS benefits.  When you have other income such as earnings from continuing to work, investment income, pensions, etc. up to 85% of your SS can be taxable.

 What confuses people about this is that before you reach full retirement age, if you continue working while drawing SS, your benefits can be reduced if you earn over a certain limit. (For 2017 that limit was $16,920 —for 2018 it will be $17,040—for 2019 it will be $17,640— for 2020 it will be $18,240)  After full retirement age, no matter how much you continue to earn, your benefits are not reduced by your earnings; your employer will still have to withhold for Social Security and Medicare.

To see how much of your Social Security was taxable, look at lines 6a and 6b of your 2020 Form 1040

https://ttlc.intuit.com/questions/1899144-is-my-social-security-income-taxable

[MissMCJ]

@NCperson  I just did some quick calculation in my head, nothing on paper.  After you enter gambling winnings the screen comes up to enter losses.  If there are enough to offset the winnings, then the refund would be changed.  Casinos usually base their withholding on what you will be taxed.  With no other income or deductions, not knowing martial status, deductions, I estimated that they would be close to the mark.

[NCperson]

Nope - while the gambling losses are offset to the extent of gambling winnings, they only go on Schedule A so if he doesn't have at least $12,400 of losses, it doesn't do anything.  

For the benefit of many that simply don't understand taxes, they look to responders as experts on the subject.   I l like to document my responses with links, references to specific forms, etc.  You'll note others do likewise as it add credibility to the answers. Suggest doing likewise for the benefit of all

[Mike9241]

amounts paid for losing tickets are gambling losses.  they are only deductible to the extent of gambling winnings and then you must be able to itemize your deductions because the losses are reported on schedule A.