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Multicolored lottery balls

The Powerball and Mega Millions jackpots already are close to a combined $600 million. As the drawing times near, more people will play, creating even larger eventual jackpots.

Of course, the chances of winning both drawings — roughly 1 in 75 quadrillion (that's 15 zeros) by one estimate — is even more minuscule than the general winnings odds of either alone.

Still, millions of us will buy lottery tickets. Full disclosure: I'm one of them. Don't judge me. But don't call me either if I win!

In fact, whoever wins Mega Millions major jackpot on Tuesday (Oct. 2), which as of my typing (Saturday, Sept. 29) stands at $367 million since no one had all the numbers last night, or today's (Saturday, Sept. 29) $213 million Powerball pick should stay mum, at least for a while.

That's just one of the pieces of advice most financial advisers give winners of any big prize. You want to give your self time to absorb your good luck before you're swamped by the media and family and friends and you didn't know you had.

You also need time to think about the tax implications of your lottery win. In this case, check out my are 5 quick tax tips for dealing with your new lottery wealth.

Gambling losses still good for taxes: One of those tips (which is today's Weekly Tax Tip) includes using any gambling losses to reduce your taxable lottery winnings.

Of course, when you're talking millions, chances are you've not gambled away enough to make a noticeable (or any) dent in your winnings.

But since most of us will win, if we're lucky, only a fraction of this weekend's jackpots. So subtracting our gambling losses from a $200 scratch-off lottery win could help lower the tax we owe on that amount.

The good news is that while the Tax Cuts and Jobs Act (TCJA) did eliminate some itemized deductions, it left this option in place. We unlucky bettors still can deduct all our gambling losses during the tax year against our winnings.

Changes to work, not betting, itemized deductions: There's been some confusion here (thanks Congress, NOT!) since the TCJA did do away with the itemized miscellaneous expenses deduction.

That section of the Schedule A, which was officially titled Job Expenses and Certain Miscellaneous Deductions, covered unreimbursed job-related costs incurred by employees. These are were things such as license and regulatory fees, required medical tests, uniforms, continuing education and home-office costs that employees pay out of their own pockets in order to do or do better their wage-earning jobs.

Also now gone with the erasure of that itemized expenses section is the deduction for tax preparation fees, as well as the write-off for investment expenses, such as a safe deposit box to security store your non-digital securities.

Of course, these prior-tax-law miscellaneous claims weren't that easy to claim for most filers. They had to be more than 2 percent of the taxpayer's adjusted gross income (AGI).

That meant if your AGI was $50,000 your allowable miscellaneous expenses had to be more than $1,000 ($50K x 2% = $1,000). And even then, only the amount more than $1,000 was deductible. So if your misc expenses came to $1,005 then you could claim only five bucks. Bummer. 

Still, if you planned carefully (aka bunched your deductions), you might have been able to use the miscellaneous deduction. But for tax years 2018 through 2025 (or longer if Tax Reform 2.0 is enacted; it cleared the House this morning, but odds are against it making it through the Senate), the main miscellaneous expenses deduction is no longer available.

Itemizing still can reducing tax on winnings: The new tax, however, law didn't touch the section of Schedule A, titled Other Miscellaneous Deductions.

The other assorted allowable expenses that still can be claimed on Schedule A include gambling losses. Insert your own joke here about federal lawmakers being fond of this write-off since they're always playing election odds.

Gambling losses include, but aren't limited to, the costs of non-winning bingo, lottery and raffle tickets, casino games, poker games and sports betting, which is about to get a lot more available thanks to the Supreme Court's ruling in May that states can take bets on professional and college athletic events.

You can use all your gambling losses to offset your gambling winnings. This is important if you spread around your gambling dollars.

It means that you don't have to have to use just losing race track betting slips to offset your winnings on horses at your local track. You can use any gambling losses against all your gambling winnings.

While there's no restriction on the types of losses that can offset winnings, those loss claims are not unlimited. You can only count up to the amount of your winnings.

So if you had $200 in scratch-off ticket winners and $300 in losing dog track bets, only $200 of your losing race slips can be used to zero out your taxable lottery winnings.

And you cannot carry any excess gambling losses to future tax years.

But unlike the previously available work-related miscellaneous expenses deduction, there is no AGI percentage to meet here.

So hang onto all your losing betting slips and other receipts and records in case the gambling gods smile on you.

And good luck with this weekend's Powerball and Mega Millions drawings.

You also might find these items of interest:

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