With everybody seeing lotto numbers and dollar signs, I figured I would take the time to see if there were any safe ways to test your luck so to speak. I spoke with some of my friends at TLC.com and they offer some tips to play the lotto even if it’s not for the giant enchilada.
1. Take prudent precautions- If possible, always buy your own lottery tickets. Don't ask neighbors or friends to pick them up for you. Similarly, don't pick up tickets for others. Don't loan or borrow money for tickets, and don't go halfsies, either. Why? Isn't this a trifling matter -- the same as picking up a loaf of bread for someone at the store? Not quite. If the ticket doesn't win or if the prize is small, then there's usually no problem. But if the ticket turns out to be a jackpot winner, you could have a sticky situation on your hands. At the very least, it could be embarrassing. This little favor for a neighbor now involves millions of dollars.
For instance, maybe your neighbor said she'd pay you the dollar for the ticket later. Fine, you think. What's a dollar? You give her the ticket, and she's now a millionaire. Be honest. Would you perhaps feel you're entitled to part of the windfall? After all, you did buy the ticket with your own money. OK, it wasn't technically your money. It was money you loaned your neighbor. Still, you did go and purchase the ticket, so you might feel you're entitled to some of the winnings.
2. Know your states rules as well as the IRS’ rules- The IRS says you cannot offset losses against winnings and report the difference. For example, if Rona spends $1,600 a year on tickets and wins only $600, she must report the $600 even though her losses amounted to $1,000. According to the tax rules, if you have gambling losses, you can claim them as an itemized deduction, but you cannot deduct more than the winnings reported. So if Rona itemizes her deductions, she can take only $600 as an itemized loss on schedule A.
On the other hand, if Marc spends $600 and wins $1,600, he too must report the $1,600. But if he itemizes, he can claim the entire $600 as a loss on schedule A since he is allowed to report any losses up to $1,600. Ironically, this law helps winners more than it helps losers. So think positively. Think like a winner, and save those old tickets.
In case you live in one of the states that doesn't have a lottery, you may be tempted to enter lotteries in other states. That's fine, provided you go to the area and purchase the ticket in person. There are several federal and state laws concerning the lotteries. One is the U.S. Postal Service regulation that forbids the mailing of unplayed lottery tickets across state lines.
Some states' laws prohibit the sale of tickets by phone, mail, fax, and over the Internet. If your state has a lottery, it makes little sense to enter either out-of-state or foreign lotteries. Chances are you'll find better odds right in your own backyard, without the extra fee or the risk. Can you imagine winning several million dollars only to discover that you haven't actually won it after all? It seems that any time big money is involved, there are those who try to get a piece of the action -- illegally.
3.Play smart- That goes without saying, if you've been playing for any length of time, by now you've surely heard the advice: "Don't play popular numbers." Why? Certain groups or combinations of numbers are played by hundreds or even thousands of people on any one Lotto night. So why would you care about that? Because if you played 1, 2, 3, 4, 5, and 6 and those numbers were drawn, there may be thousands of people to split the prize with. In a $5 million jackpot, you could end up with less than a Pick 3 payoff. What are the popular combinations? There are the sequences such as the one just given as well as sequences of multiples of a certain number. One popular sequence, which consists of multiples of the number 5, is 5, 10, 15, 20, 25, and 30. And because the number is considered lucky, people often play the multiples of 7: 14, 21, 28, 35, 42, and 49.
Another less common practice is to use all numbers of the same value. Sometimes people will play all numbers with the value of the number 3: 3, 12, 21, 30, 39, and 48. Suppose your primary number is 3, because your birthday is March 21. As you previously learned, 21 -- or any number with the value of 3 -- is lucky for you. However, don't use them all on the same play slip. Spread them out over several different plays. Other selections aren't so apparent. What, you might ask, is so common about this combination: 8, 11, 18, 21, 28, and 31? If you fill in these squares on some states' Little Lotto or Lotto play slips, you'll see that these make a zigzag pattern depending on the layout of your play slip.
4. Get in touch with the Lottery- There are several ways of finding out about the lottery. Sometimes, however, you'll need to contact the lottery itself, either directly or indirectly, for answers to your questions. The different states vary as to which medium gives what information. Here's what you can expect to find -- and where:
Newsletters. Again, each state differs as to information given. But generally, the publications (you'll find them free at lottery retailers) contain at least some of the following: new games (on-line and instant), prizes remaining on instant games, special promotions, brief winner stories, winning numbers for the past weeks or months, and hot/cold numbers. At the very least, you'll find leaflets explaining how to play the games and information on new games.
Phone lines. While some of these may still be referred to as "hotlines," most phone numbers to your state lottery are "customer service lines." Rarely do they give the drawing results, but instead they provide information on claiming a prize, such as the location of the nearest claim center or, in the case of a jackpot, information about the lottery headquarters. You'll find these numbers on the back of your ticket.
Web sites. These are now the preferred method to learn about your state's lottery. They generally offer a gold mine of information. Variously, you may discover the legal age to play, games (existing and upcoming), instant games (usually with graphics), odds, playing instructions, times and dates of drawings, and drawing results (some extending several months into the past). You may also read about new winners and learn how to collect your prize money. Some sites offer a Frequently Asked Questions section. If your state offers Mega Millions or Powerball, you'll find either a link or information on it. It's easy to find the Web site. Just look on your ticket.
E-mail. Have questions? E-mail them to your state lottery. You'll find the address on the Web site
5. Last, but most certainly not least, if you win- Before you can win, you must first find out if you hold a winning ticket. Always double-check the date and the numbers on your lottery tickets with the winning numbers for that day's drawing. And if you missed the drawing on television, it's also a good idea to check more than one source. The Michigan Lotto hotline once gave the wrong winning numbers for the Daily 4. The mistake was corrected in a few minutes, but can you imagine the dismay of anyone who destroyed his ticket and later found out he'd won?
And it wouldn't hurt to give that scratch-off ticket another glance before you throw it away just to make sure you haven't beaten the dealer, opened the cash vault, spun 'n' won, bingoed, won for life, or otherwise come into some cash. Incredible as it may seem, literally millions of dollars go unclaimed each year. For whatever reasons, people may get rid of a ticket, lose it, or throw it away by mistake. But their loss can become someone else's gain. Here is some important information for lucky winners:
First and foremost: Whether you've won a little or a lot -- even before you're sure you have won -- sign the ticket. Unsigned, the ticket is a bearer instrument. This means it belongs to the bearer just like cash.
Don't let time run out. Many states' deadlines for on-line games are 180 days from the date of the drawing. But time limits vary from state to state and from game to game, so check the previously mentioned sources, the back of the play slip, or the back of the instant ticket to make sure.
Some states have different rules, but generally you can take your winning ticket that's less than $600 to the lottery retailer, who will pay you the money. Other states (just to complicate matters) set the limit at up to, and including, $600.
While some lotteries say you may take care of this by mail, it is not advisable. In the same way, it would be foolish to put a thousand dollars in cash into an envelope and mail it.
In the case of jackpots, some states pay in one lump sum, now called cash value option. Others pay by annuity (installments over a period of years). Still others give you a choice. Sometimes this choice must be made when you buy the ticket.
The IRS requires lotteries to withhold 25 percent federal tax from prizes more than $5,000. There also may be a smaller state tax withheld.
Important: See a tax attorney before collecting the prize. If a jackpot winner dies, heirs will get the money just as any other holding, such as real estate. But unless the deceased has set up legal trusts, inheritance taxes could wipe out nearly the entire fortune.
Keep a low profile. Aside from the lawyer and close family members, tell no one. Until you've had your ticket validated, you're in a somewhat precarious situation. For your own safety -- not to mention that of the ticket -- the fewer who know, the better.
There you have it, just some tips to help make your lotto excursion a little better. Good luck, have fun, be careful!