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Virginia Lottery's new in-state game awards $1 million, taxes paid

Topic closed. 21 replies. Last post 1 year ago by realtorjim.

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Artist77's avatar - batman14

United States
Member #121745
January 16, 2012
4808 Posts
Online
Posted: August 25, 2015, 8:07 pm - IP Logged

Don't get attached to this game. I am sure it will be replaced  in less than a year with something else. Bring back Decades of Dollars.

J'aime La France.

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    NY
    United States
    Member #23835
    October 16, 2005
    3475 Posts
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    Posted: August 26, 2015, 1:26 am - IP Logged

    "This is a really great idea. Win a million, actually bank a million."

    There's a reason they're calling the game "Bank a Million" instead of "Tax-free Million" or something similar. If you were to win they'd give you an even $1 million dollars, so you really could put a million in the bank, but you won't clear a million after taxes.

    The prize is just big enough to cover the required tax withholding, which is 25% for federal taxes and 4% for VA income tax. Since that prize will put you in the top bracket you can expect to pay an additional 14.6% to the IRS and another 1.75% to VA. That's another 16.35% you can expect to owe (less a fairly modest amount since some of it may be taxed at the rates for lower brackets, depending on your other income). That 16.35% will be on the pre-withholding prize of $1,408,451, meaning you should expect to unbank as much as $230,000 sometime after banking the million.

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      Maryland
      United States
      Member #162434
      January 2, 2015
      896 Posts
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      Posted: August 26, 2015, 5:12 am - IP Logged

      the 2.00 price tag negates most of the value in this game. better off searching for another state lottery with a 40 or under matrix pik 6 that traditionally charges 1.00 a line and has a jackpot higher than the paltry million. not sneezing at a million mind you but if you shop you can do better.

      It is nice that there are betting OPTIONS that must add up to $2, that is new to me.  Never seen that before.

        HaveABall's avatar - rocket

        United States
        Member #72448
        March 18, 2009
        1228 Posts
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        Posted: August 26, 2015, 8:16 am - IP Logged

        Well, KY Floyd, it's all in the WORDING, isn't it!  This game still sounds like a good deal (though I wouldn't play it because the jackpot prizes don't meet my needs).  However, KY Floyd, thanks for breaking down how much is really banked after the remainder taxes are taken out the following year.  Cheers!

        Thinking of...

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

        Disney

          mikeintexas's avatar - tx avatar-1.gif
          Texas Panhandle
          United States
          Member #136843
          December 20, 2012
          1285 Posts
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          Posted: August 26, 2015, 8:34 pm - IP Logged

          You might bank a million, just keep in mind that the extra fluff still counts against you as ordinary income.

          I griped about that very thing a yr. or so ago in another thread.  Lottery wins are counted as ordinary income, yet how can the govt. claim a JP win is "ordinary"?  It's really more of a "windfall profits" tax.   I can understand - even if I don't agree with the percentages - taxing the $413, 400 top bracket income (on single filers, it's more for married/filing jointly and head of household) at 39.6% ,  that's income that's most likely fairly consistent- but a multi-million dollar lottery win is a once-in-a-lifetime event.

          It's one thing I actually agree on with a certain non-US member in here who constantly harps on anonymity and counselling for lottery winners, as well as lottery winnings being tax-free...which is the thing I agree with.  Even if a JP win was taxed, 39.6% is simply too much for taking the win in a lump sum.   I don't know what's "fair", but 10% sounds perfectly reasonable. 

          I forget the exact figures, but I remember calculating that the $230+ million that the elderly Florida resident Gloria MacKenzie paid in federal taxes was just enough to run the govt. for about a half hour.

            Scratch$'s avatar - sm lottery.jpg

            United States
            Member #158848
            September 5, 2014
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            Posted: September 7, 2015, 10:58 pm - IP Logged

            The FedGov should get no more than 10%, and the states no more than 5%.

            Scratchers ~ Cash 5 ~ Powerball ~ Mega Millions

              realtorjim's avatar - images q=tbn:ANd9GcT7U3t20NgScoPlxOqLT6TR0vQeJNBV3_tTswe1XeFDTsdw3NLZ

              United States
              Member #106923
              February 27, 2011
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              Posted: September 14, 2015, 2:53 pm - IP Logged

              The FedGov should get no more than 10%, and the states no more than 5%.

              You are forgetting one important aspect... GREED!  The Beatles hit the nail on the head when they sang "And you're working for no one but me TAXMAN".

                I'm feeling a jackpot win coming my way!