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First time player wins $5 million lottery jackpot

Topic closed. 25 replies. Last post 7 years ago by mylollipop.

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California
United States
Member #80929
October 7, 2009
94 Posts
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Posted: November 4, 2009, 4:54 pm - IP Logged

Wow the tax is painful to see, she should have played in the UK as $5m won would have been tax  free, I guess us players in the UK are fortunate to have a game that offers no tax deduction, anyway congrats to her

Buttercake,

no, the $5M is the lotto award over 20-26 years in payments.  If you want all the cash upfront, then you typically divide by 2.  After that you must take away US Federal Government (IRS) taxes, typically about 38%.  After that, if the state taxes lotto winnings, you must take away state taxes, typically about 12%.  New York taxes lotto winnings, California does not.  This is why, to get a general idea how much someone wins in the USA, you divide the jackpot by 3 to get the cash payout after taxes.  It's usually slightly more than that.

    charmed7's avatar - Lottery-013.jpg
    MICHIGAN
    United States
    Member #65282
    September 22, 2008
    1992 Posts
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    Posted: November 5, 2009, 8:20 am - IP Logged

    WTG thats a good hit Pitcher

      buttercake's avatar - Lottery-029.jpg

      United Kingdom
      Member #70550
      February 5, 2009
      120 Posts
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      Posted: November 6, 2009, 9:14 am - IP Logged

      Buttercake,

      no, the $5M is the lotto award over 20-26 years in payments.  If you want all the cash upfront, then you typically divide by 2.  After that you must take away US Federal Government (IRS) taxes, typically about 38%.  After that, if the state taxes lotto winnings, you must take away state taxes, typically about 12%.  New York taxes lotto winnings, California does not.  This is why, to get a general idea how much someone wins in the USA, you divide the jackpot by 3 to get the cash payout after taxes.  It's usually slightly more than that.

      I do understand that if she decides to keep the whole $5m it is paid over 20+ years in instalements, and how the $5m won gets divded, what I was saying is that over here in the UK if you win $5m, $10m or whatever amount, it is paid out in one lump sum tax free there is no options for it to be paid out in instalements, what you win is what you get, so you win $10m today you call up the lotto office go down to collect the cheque for $10m, plus the sooner you call up the lotto office the sooner ineerest is paid into your bank account for the $10m won

        rdgrnr's avatar - walt
        Way back up in them dadgum hills, son!
        United States
        Member #73904
        April 28, 2009
        14903 Posts
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        Posted: November 6, 2009, 9:59 am - IP Logged

        I do understand that if she decides to keep the whole $5m it is paid over 20+ years in instalements, and how the $5m won gets divded, what I was saying is that over here in the UK if you win $5m, $10m or whatever amount, it is paid out in one lump sum tax free there is no options for it to be paid out in instalements, what you win is what you get, so you win $10m today you call up the lotto office go down to collect the cheque for $10m, plus the sooner you call up the lotto office the sooner ineerest is paid into your bank account for the $10m won

        Hi buttercake,

        Do you pay any kind of income tax on it at the end of the year or any tax whatsoever at any time?


                                                     
                             
                                                 

         

         

         

         

                                                                                                           

        "The only thing necessary for evil to triumph is for good men to do nothing"

                                                                                                    --Edmund Burke

         

         

          konane's avatar - wallace
          Atlanta, GA
          United States
          Member #1265
          March 13, 2003
          3333 Posts
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          Posted: November 6, 2009, 10:06 am - IP Logged

          Party PartyPartyParty

           

          Congratulations!!!!!!! Way to go!!!!!

          I Agree!

          Good luck to everyone!

            marlon39's avatar - avatar 3245.jpg

            Philippines
            Member #71195
            February 20, 2009
            226 Posts
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            Posted: November 7, 2009, 3:17 am - IP Logged

            Congratulations Party

            "I firmly believe that any man's finest hour, the greatest fulfillment of all that he holds dear, is the moment when he has worked his heart out in a good cause and lies exhausted on the field of battle-victorious."
            - Vince Lombardi

              larry3100's avatar - larry icon2.jpg
              Redwood City,California
              United States
              Member #70503
              February 3, 2009
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              Posted: November 8, 2009, 6:31 pm - IP Logged

              That's $onemillion,eighthundred sixtyninethousand twohundred and sixtythree dollars.Better than NOTHING ! I Agree!

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                United States
                Member #10720
                January 23, 2005
                933 Posts
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                Posted: November 17, 2009, 9:01 pm - IP Logged

                The $5M would be with the Lottery investing in whatever, so the 2.x with cash option, and then taxes.
                The $2.8M or so is what the total sales are for this jackpot so far MINUS the takeout (what the Lottery
                uses for their costs or Education etc.), and then out of that is about 1/3 in taxes. The $5M is the advertised
                *annuity* jackpot meaning over years it's invested and paid out slowly so the remaining balance earns
                interest. The rule of thumb is, whatever the Annuity prize is ("The jackpot is now....") take a 1/3 portion of
                it, and that is the net prize cash option, or 2/3 for Annuity.

                The ticket says QP after the numbers so it is in error they say she "picked" them. It was random.

                I remember when the people won at Chubb in nj, I said "buy oil NOW!"... it was $40/bbl. then. Now $80.
                They'd have doubled their money!!!

                  buttercake's avatar - Lottery-029.jpg

                  United Kingdom
                  Member #70550
                  February 5, 2009
                  120 Posts
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                  Posted: November 25, 2009, 11:39 am - IP Logged

                  Hi buttercake,

                  Do you pay any kind of income tax on it at the end of the year or any tax whatsoever at any time?

                  Hi rdgrnr, No income tax or any form of tax is paid on any lottery wins here in the UK, it is 100% tax free.

                    savagegoose's avatar - ProfilePho
                    adelaide sa
                    Australia
                    Member #37136
                    April 11, 2006
                    3300 Posts
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                    Posted: November 25, 2009, 4:25 pm - IP Logged

                    hi im from australia. We also state our lotto is tax free, but it isnt. sure the winnings isnt taxed, but the gov still gets it tax how? every ticket purchased it taxed.

                    in a way i prefer the way the US taxes its lotto, i mean the winner can afford to be taxed more than all us losers can.

                     

                    anyhow same her ein aust. its stated as tax free but it is just taxed form different people.

                    2014 = -1016; 2015= -1409; 2016 JAN = -106; FEB= -81; MAR= -131; APR= - 87: MAY= -91; JUN= -39; JUL=-134; AUG= -124; SEP = -123; OCT= -84  NOV=- 73 TOT= -3498

                    keno historic = -2291 ; 2015= -603; 2016= JAN=-32, FEB= +12 , MAR= -86, APR = -77. MAY= -48, JUN= -29, JUL=-71; AUG = -52; SEPT= -43; OCT = +56 NOV = -33 TOT= -3297

                      mylollipop's avatar - Trek STLOGO6.png

                      United States
                      Member #24380
                      October 21, 2005
                      623 Posts
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                      Posted: November 26, 2009, 10:22 pm - IP Logged

                      Blue Angel.  Just wonderful and she is sharing her blessing with her church.  No more bus tickets needed now.  I am so happy for you.  Just wonderful!