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N.C. Powerball lottery winner claims share of jackpot worth $188 million

Topic closed. 49 replies. Last post 2 years ago by Scratch$.

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Original Bey's avatar - Lottery-022.jpg

Bahamas
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September 30, 2012
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Posted: February 25, 2015, 11:36 am - IP Logged

Then why does she have to pay $20 million in taxes (according to Drenick1). I thought the govt/ state already took out the tax before she got the money.

For the love of Ella! The lottery withholds 25% an additional 14% is due when she files. Uncle Sam is just eager to get most of it upfront.

"Everything works  ONCE!"

    noise-gate's avatar - images q=tbn:ANd9GcR91HDs4UJhjxO7cmeMQWZ5lB_FOcMLOGicau4V74R45tDgPWrr
    Bay Area - California
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    Posted: February 25, 2015, 11:42 am - IP Logged

    When she files her tax every year. I assumed her winnings also get taxed again, depending on the  tax rate.

    The Govt takes their 25% off the Top BEFORE you get your cheque Sole- they then come back for their 2nd bite at that Apple the following year for a Total of 39 plus % Total..so they get about 40%..After that you clear and free unless as stated, investments etc etc etc..

    ***Check out the explanation on lottery taxes at the bottom of Usamega FAQ. It's all there.

    People who say it cannot be done should not interrupt those who are doing it- George Bernard Shaw.

      Avatar
      NYC
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      November 17, 2014
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      Posted: February 25, 2015, 1:00 pm - IP Logged

      ^Ok thanks for clearing it up. I must have gotten the numbers mixed up. Part of the confusion might  have been because USAmega jackpot analysis has 25 % federal tax withholding when I know it's around 39 %.

        Think's avatar - lightbulb
        Marquette, MI
        United States
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        August 20, 2005
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        Posted: February 25, 2015, 1:58 pm - IP Logged

        The Govt takes their 25% off the Top BEFORE you get your cheque Sole- they then come back for their 2nd bite at that Apple the following year for a Total of 39 plus % Total..so they get about 40%..After that you clear and free unless as stated, investments etc etc etc..

        ***Check out the explanation on lottery taxes at the bottom of Usamega FAQ. It's all there.

        Bottom line is if you win you need to hire a tax attorney.

        There are circumstances where you may also have to pay the 3.8% Obamacare vigorish on top of the 39.6% so you may wind up having to pay 43.4% to the feds because of the Obamacare vigorish.

        http://www.cpapracticeadvisor.com/news/11309896/reality-bites-the-new-38-net-investment-income-surtax

        The vigrorish applies to annuities but I don't know if that is prize annuities or investment annuities.  If it applies to lottery annuity winnings then I don't see why anyone would ever take the annuity option ever again.

          Piaceri's avatar - sarsony1
          Republic of Texas
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          Posted: February 25, 2015, 2:10 pm - IP Logged

          ^Ok thanks for clearing it up. I must have gotten the numbers mixed up. Part of the confusion might  have been because USAmega jackpot analysis has 25 % federal tax withholding when I know it's around 39 %.

          The lottery is only required to withhold 25% up front. That is what is reported on USAMega. You, as the winner are required to report your winnings on your tax return, and pay the balance owed up to that 39% top tax rate. 

          Example:

          You win $1,000,000 cash:

          When you pick up your check (or get funds wired), you only get $750,000 unless your state has income tax - then you get less.

          The lottery sends $250,000 (25%) to the IRS for federal taxes.

          THEN, when you file your income tax return in April following the year you win your jackpot, your taxes owed will be much more, coming close to 39% with you owing more or less than an additional $140k.

          face

          singlewinnersinglewinnersinglewinner   

            rcbbuckeye's avatar - Lottery-043.jpg
            Texas
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            Posted: February 25, 2015, 3:44 pm - IP Logged

            The lottery is only required to withhold 25% up front. That is what is reported on USAMega. You, as the winner are required to report your winnings on your tax return, and pay the balance owed up to that 39% top tax rate. 

            Example:

            You win $1,000,000 cash:

            When you pick up your check (or get funds wired), you only get $750,000 unless your state has income tax - then you get less.

            The lottery sends $250,000 (25%) to the IRS for federal taxes.

            THEN, when you file your income tax return in April following the year you win your jackpot, your taxes owed will be much more, coming close to 39% with you owing more or less than an additional $140k.

            Explained very well.

            I really can't understand why so many still don't understand how the tax thing works.

            CAN'T WIN IF YOU'RE NOT IN

            A DOLLAR AND A DREAM (OR $2)

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              February 15, 2015
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              Posted: February 25, 2015, 4:48 pm - IP Logged

              OldSchoolPa you are 100% correct about biblical tithing!  I'm impressed!  Big Smile  Not many in the Christian faith are aware of this.  They're wrapped up in their denominational doctrines often times making themselves victims of their congregations.  They are being held captive to the confusion of deliberate error.  Only the Levites were allowed to receive the tithe; it was against the Law for anyone else to receive the tithe.  It was forbidden!  Tithing does NOT go to your greedy pastor and has no place in the Body of Christ.  It never involved money!  You get an A+, OldSChoolPa....Hyper

                mightwin's avatar - questns

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                Posted: February 25, 2015, 5:21 pm - IP Logged

                Hopefully she found some "good" advisors in that short amount of time.......

                  Get paid's avatar - Lottery-062.jpg
                  texas
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                  February 11, 2014
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                  Posted: February 25, 2015, 5:56 pm - IP Logged

                  Congrats again Marie Holmes,its great that in order to win a jackpot,or a substanial a amount of money.All you have to do is buy a ticket.Doesn,t matter who you are.Black,white,hispanic,rich,poor,xcon,just buy a ticket.Glad its like that,because if some of the haters on this site had their way a person like Marie Holmes,wouldn,t be allowed to win. Its your money Marie do what you want with it.

                    HaveABall's avatar - rocket

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                    Posted: February 25, 2015, 6:22 pm - IP Logged

                    Bottom line is if you win you need to hire a tax attorney.

                    There are circumstances where you may also have to pay the 3.8% Obamacare vigorish on top of the 39.6% so you may wind up having to pay 43.4% to the feds because of the Obamacare vigorish.

                    http://www.cpapracticeadvisor.com/news/11309896/reality-bites-the-new-38-net-investment-income-surtax

                    The vigrorish applies to annuities but I don't know if that is prize annuities or investment annuities.  If it applies to lottery annuity winnings then I don't see why anyone would ever take the annuity option ever again.

                    That was kind of you, Think, to carefully explain all to Sole!  Plus, explain about the newish additional 3.8% Federal Medicare Tax that has been going to our Federal Treasury Department's Trust ... instead of Federal Medicare Department Trust [what/why?]!  Folks on this site (or any lottery site) rarely write about that biggie federal tax.

                    Consequently, very few lottery ticket gamblers have trained their brains to look at the advertised multi-millions "annuity amount" and simply divide that number by 3; to give an approximation of what cash they'd be getting to keep.

                    Mail For You Patriot

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

                    Disney

                      Loops's avatar - disney14
                      Louisiana
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                      Posted: February 25, 2015, 8:42 pm - IP Logged

                      She'd have to pay extra for the year in which she won because when the lotteries only withhold 25% for federal taxes when her actual tax burden is going to be closer to 39.6%. That's only for the year she won, though. Any years after that are only going to be looking at interest/investment income she (hopefully) makes off the lump sum for that year.

                        OldSchoolPa's avatar - Lottery-057.jpg
                        Gurnee, Illinois
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                        Posted: February 26, 2015, 8:33 am - IP Logged

                        I wonder OSP what the Church would say if she bought a Farm, dropped off her "Tithe" of  crops/ livestock at the Church Door: would they refuse it?

                        Since there is no tithing mandate for New Testament Christians (actually there were no OT Christians since Christ had not come in that era so there is no tithing mandate for Christians, PERIOD.), it is likely most church pastors, reverends, bishops and apostles would reject tithe of crops since they are only interested in your money. Don't believe that? If you go to church, please note the frequency and duration they spend talking about tithing and giving (the two are not the same so you will have to listen carefully...be critical and objective). Then compare that to the time spent talking about Christian virtues. You will be enlightened by this and by reading the entire Chapters of Scripture covering the issue of tithes, offerings and giving.

                        Get MONEY!!! Winning a JACKPOT lottery is all the HOPE and CHANGE I desire!!!  NOW give me MONEY!US Flag

                        The guy who won the presidency in 2008 really won the lottery...he is now millions richer, travels in first class style, and even has a staff that would be the envy of the richest Powerball winner (she has a staff of 2). Every night he goes to sleep, he probably plays the close of Dave Chappelle's Show: I'm rich beyatch!

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                          NYC
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                          Posted: February 26, 2015, 9:17 am - IP Logged

                          Speaking of taxes. I wonder if there is any loop hole to get around the tax on gifts. Lets say you win some money, and a friend/ family ask you for a car or money to pay for it. And the car price is over $14, 000. The limit before you have to pay gift  tax on it. What if you buy the car and then sell it to the friend/ family at cheap price that they can afford. I wonder if that would work since you are actually selling it to them and not giving it away.

                            Goteki54's avatar - Lottery-007.jpg
                            Baltimore, MD
                            United States
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                            May 30, 2013
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                            Posted: February 26, 2015, 9:32 am - IP Logged

                            Marie Holmes's win can finally put to rest once and for all the conspiracy theory MYTH  about the lotto being "racially rigged". The other winner is from Puerto Rico. If these wins don't silence the conspiracy theories nothing will, their just stuck on stupid. Anyways congrats to all the winners and especially Ms Holmes. She definitely needed the money, and I hope she and her family have a great life enjoying it. She definitely has her head on straight.Party

                            Following the trends and patterns means following the money!Banana

                              Saylorgirl's avatar - Lottery-065.jpg
                              Indiana
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                              June 13, 2012
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                              Posted: February 26, 2015, 12:07 pm - IP Logged

                              Speaking of taxes. I wonder if there is any loop hole to get around the tax on gifts. Lets say you win some money, and a friend/ family ask you for a car or money to pay for it. And the car price is over $14, 000. The limit before you have to pay gift  tax on it. What if you buy the car and then sell it to the friend/ family at cheap price that they can afford. I wonder if that would work since you are actually selling it to them and not giving it away.

                              I think they keep a close eye on those type of transactions.  What you can do if you have a spouse is each of you can gift $14,000 in a single year.  Or if your friend or family member has a spouse you could give each of them $14,000 in a single year.  However, if you and your friend/family are both single.  In December you can gift them $14,000 they cash the check and put in the bank and then on January 1st you can gift them a second check and they go buy their car.