Welcome Guest
Log In | Register )
You last visited December 6, 2016, 2:46 pm
All times shown are
Eastern Time (GMT-5:00)

Powerball lottery jackpot cracks $200M mark

Topic closed. 37 replies. Last post 7 years ago by Perfecttiming2.

Page 3 of 3
PrintE-mailLink
HaveABall's avatar - rocket

United States
Member #72448
March 18, 2009
1228 Posts
Offline
Posted: August 15, 2009, 6:01 pm - IP Logged

All I know that winning the MM in my state (Ohio), and choosing this cash option nets you $68 million after taxes.

No Jim!  If you recalculate Fed tax of 34% (true, they initially only withdraw 25%, but you are required to repay the remainder by the end of this calendar year -- whether they instruct you so or not or BIG additional tax penalty -- so don't accidentially lock-up/non-liquidity designate the remaining tricky 9% due) AND State tax of 6%your net will be $63.6 Million Dollars.  Be careful not to spend that $4.4 you mistakingly thought was yours to keep! 

This is why, when you win, the first person you rapidly visit is a net big lottery experienced  tax attorney (yep, covers law AND tax in one fell swoop, suddenly creating a family foundation, or a trust, or a few trusts, or some type of annuity, or a corporation might make sense in your new high net worth paradigm situation).

Mail For You

Having several millions of dollars in my financial accounts means receiving several valuable services each day!

Disney

    Guru101's avatar - rw6jhh
    Indiana
    United States
    Member #48725
    January 7, 2007
    1953 Posts
    Offline
    Posted: August 15, 2009, 6:57 pm - IP Logged

    No Jim!  If you recalculate Fed tax of 34% (true, they initially only withdraw 25%, but you are required to repay the remainder by the end of this calendar year -- whether they instruct you so or not or BIG additional tax penalty -- so don't accidentially lock-up/non-liquidity designate the remaining tricky 9% due) AND State tax of 6%your net will be $63.6 Million Dollars.  Be careful not to spend that $4.4 you mistakingly thought was yours to keep! 

    This is why, when you win, the first person you rapidly visit is a net big lottery experienced  tax attorney (yep, covers law AND tax in one fell swoop, suddenly creating a family foundation, or a trust, or a few trusts, or some type of annuity, or a corporation might make sense in your new high net worth paradigm situation).

    Mail For You

    You said 34%. I keep hearing people say "No, it's not actually 25%, it's actually <insert percentage here>". In yet, every time they say that, they fail to say specifically what the additional taxes are on. As far as I know, federal tax is 25%. Could someone explain where this "additional" amount comes from? What exactly are you being taxed on?

    Gonna win.Big Smile

      Grovel's avatar - f800e6a39fbfea795d1dcbb09f2244
      Little Rock, AR
      United States
      Member #68365
      December 19, 2008
      241 Posts
      Offline
      Posted: August 15, 2009, 7:01 pm - IP Logged

      I know what you mean, would be nice for Arkansas people to play right now without going over the border.

      Plus, when it comes to Arkansas, it looks like Powerball will be the only game available with a real lottery drawing.  Sadly, Arkansas will begin life with an "F" on the State Lottery Report Card.

      Hopefully that will change, but when I voted for the lottery I had powerball in mind. Does not really affect me too much since I won't be playing anything else.

        GamerMom's avatar - tails

        United States
        Member #60535
        April 21, 2008
        460 Posts
        Offline
        Posted: August 16, 2009, 7:47 am - IP Logged

        i can't believe powerball rolled!

          Avatar
          Baton Rouge, LA
          United States
          Member #72970
          April 1, 2009
          18 Posts
          Offline
          Posted: August 16, 2009, 8:25 am - IP Logged

          I don't agree with your idea.

          I want to win the whole 'pot - single person.   I forgive you for your ideology.

          Wish me the luck when I buy  5 tickets, I have bought the grand prize winning ticket that will have the same numbers that will be pulled out during the draw.

            barbos's avatar - gold bar-and-cash1.jpg
            California
            United States
            Member #23908
            October 17, 2005
            122 Posts
            Offline
            Posted: August 16, 2009, 9:26 am - IP Logged

            You said 34%. I keep hearing people say "No, it's not actually 25%, it's actually <insert percentage here>". In yet, every time they say that, they fail to say specifically what the additional taxes are on. As far as I know, federal tax is 25%. Could someone explain where this "additional" amount comes from? What exactly are you being taxed on?

              25% is only a  down payment. A lot of winners make a charitable donations that are tax-deductible, those can be taken off the remaining taxes due.  Without deductions tax bill would be a total of 34-36 percent of winnings right now, and Obama had plans to raise it to 40% - he has a dream to provide every voter and others with a guaranteed medical care.   I am not a tax expert so this is the information I found on the forums. Would be very happy if I am wrong.

              Avatar
              NY
              United States
              Member #23835
              October 16, 2005
              3474 Posts
              Offline
              Posted: August 17, 2009, 4:55 pm - IP Logged

              You said 34%. I keep hearing people say "No, it's not actually 25%, it's actually <insert percentage here>". In yet, every time they say that, they fail to say specifically what the additional taxes are on. As far as I know, federal tax is 25%. Could someone explain where this "additional" amount comes from? What exactly are you being taxed on?

              As its name implies, you're being taxed on your income. Did you mean something else when you asked "What exactly are you being taxed on?"

              The rate at which you are taxed depends on your taxable income. The law requires that a certain amount of money be withheld, but since they won't know what your personal financial situation will be they can't possibly be precise about how much tax you'll actually owe. For regular income from a job the withholding will be based on your expected annual income and the number of exemptions you claim, but the rules for witholding don't account for any other deductions you might have. For gambling winnings over $600 the withholding is 25%. If your entire income for the year is 10 grand you won from the lottery your final tax bill will be a lot less than the $2500 that was withheld. Even if you don't have any other income, winning millions in the lottery will mean that your gross income is well beyond the threshold for the maximum US tax bracket of 35%. For anyone who thinks it's something other than 35%, that percentage is easily available from thousands of sources accessible to anyone with a computer and an internet connection.

              As for the finaltotal percentage you'll actually owe, it will depend on how much of the gross income is taxable. Even if you were to win a trillion dollars as a cash payout the final percentage would still be a hair under 35.000% because some of the income is taxed at lower rates. Whether your taxable income is 25k or 50 million, the first $16,700 is taxed at 10% (assuming married and filing jointly).  If you give 50% of your income to charities, or spend it on medical bills you may reduce your taxable income, but as a practical matter winning the current PB or MM jackpot means you can expect to pay very close to 35% of the cash amount to the IRS.

              FWIW,  when people ask how much tax they'll pay I assume they're really interested in knowing how much money they'll actually end up with. Giving a million bucks to charity may reduce your taxes by 350k, but it reduces your net by the full million bucks. The tax deduction means that it only costs you 650k to give away a full million. That's great is you really want to make that gift. If your only motivation is getting tax deduction you're spending 650k to "save" 350k. YMMV, but I'd definitely rather pay the tax than get the deduction for medical expenses.

                Perfecttiming2's avatar - redcross

                United States
                Member #65961
                October 11, 2008
                162 Posts
                Offline
                Posted: August 21, 2009, 12:05 am - IP Logged

                Powerball states  are going through a summer "fever". This Saturday is Powerball's spotlight, but Mega Millions will steal the limelight back next Tuesday. Who will take home to giant stimulus checks? Good luck everyone!

                "Giant stimulus checks!"

                .....gotta love it..........your post made me smile!

                And now............the spotlight is truly back on Mega Millions................