You win the powerball or mega millions, Taxes owned??

Reply #17

Toronto — Sun, 19 Jan 2014 00:30:15 GMT

Any income sourced outside of PR is taxed, so the 1st year you will have to pay.

Reply #16

mikeintexas — Sat, 18 Jan 2014 21:50:35 GMT

Aw, good that you know I was just joshin' ya. 39.6% is outrageous! Good Grief, even God wants just 10% from us. Uncle Sam ain't my favorite uncle these days.

.4% for fun 'n guns, huh? Yep, I'd definitely be roundin' up for those worthy causes; I'd prob. add a percentage or two to that particular fund. I've had people ask me why I play the lottery and I tell 'em I want enough money to buy a tank. What on Earth would you do w/ a tank? they ask. I don't want a tank. I reply. Just want enough... [ More ]

Reply #15

CDanaT — Sat, 18 Jan 2014 20:57:45 GMT

HA HA HA HA....sorry about that MIT....was rounding up .4 to keep it simple and make a lil hidden stash for myself for fun n guns

Reply #14

mikeintexas — Sat, 18 Jan 2014 20:50:16 GMT

39.6% We Texans have a reputation for stretching the truth, thanks to folks like you.

My mother told me at least a hundred gazillion times not to exaggerate.

Reply #13

CDanaT — Sat, 18 Jan 2014 20:41:52 GMT

You can stay in Texas without incurring a state income tax as well.....40% to the feds is bad enough

Reply #12

whiteballz — Sat, 18 Jan 2014 17:04:54 GMT

If I moved to Alaska during 2015, and live there for a total of 183 days. I would not file a state return nor pay state income tax for 2015.

You could also move to Florida and Nevada and not need to tax state income too. Or better yet, you can live in Puerto Rico 183 days out of the year and be exempt from paying federal tax on investment income. http://www.puertoricoistheanswer.com/attraactingthewealthy.html

Reply #11

Six balls — Fri, 17 Jan 2014 02:39:00 GMT

You're talking about appreciation like you're taxed on it annually. Was the gain realized? If it's just paper gains, that's unrealized and you don't pay on that. Any dividends paid by those stocks, yes, but not the paper gains. If you've sold/realized the gains, then 23.8% long term capital gains tax if you've held those stocks for over a year, less than a year is taxed as normal income at 39.6%.

Reply #10

Toronto — Thu, 16 Jan 2014 23:03:15 GMT

Now, let's say I invest the 57 million in something that pays both a dividend and can appreciate/depreciate in value starting January 1, 2015. I exit this investment on Jan 15, 2016 (over a year later); a dividend of 5 million is paid July 1, 2015. The $57 million invested also grew to 65 million from 1/1/2015 to 1/15/2016.

For the dividend (in April 2016 for fiscal year 2015), I will pay any state/local income, federal income (40%), and medicare tax (up to 3.8%) owed. In April 2017 when I fi... [ More ]

Reply #9

maringoman — Thu, 16 Jan 2014 22:52:14 GMT

You will still pay some negligible taxes such as sales tax when you buy things at the store and property taxes if you own property but no significant taxes if you just bank your money for the whole of 2015. The little interest earned there shall be your only taxable income.

Reply #8

Toronto — Thu, 16 Jan 2014 22:27:54 GMT

I win 100 million in lump sum. 25% is automatically withheld for federal taxes + 5% state income withheld as well. So I only get $70 million deposited to my account. Let's assume I don't invest at all in 2014; at the end of the year I am left with 70 still in my account.

Let's assume the total upper bracket rate for federal is 40%. When I file for taxes in April 2015 for my 2014 fiscal year...first, I can choose to deduct all the sales tax within a state that I paid throughout the year (assum... [ More ]

Reply #7

Shelby Mustang — Thu, 16 Jan 2014 22:12:11 GMT

So are you saying in 2016 you wouldnt pay anything on the whatever you have left of the win? Like say you didnt invest the money you just put it in the bank all you would pay taxes on is the interest or the whole amount in the bank PLUS the interest for 2016 tax

Reply #6

maringoman — Thu, 16 Jan 2014 22:04:18 GMT

Say you win tomorrow's night MM jackpot and claim it on Monday morning. You will pay withholding taxes on that jackpot on Monday morning as you claim the jp. In April 2015 when you file for 2014 taxes you will most likely end up paying taxes because the jp pushed you to the top income bracket. But if you don't earn any income at all in the year 2015 then in 2016 you will not owe any taxes.

Reply #5

bigbear29 — Thu, 16 Jan 2014 21:13:16 GMT

Well that's something else to think about, Fed taxes possible up too 3 years to pay.

Reply #4

noise-gate — Thu, 16 Jan 2014 21:04:26 GMT

You owe the following year as well- if my math is correct, you tax free from the Fed by the 3rd year after your win UNLESS you invested in something or bought a house etc, etc.

I stand to be corrected since l am not a tax attorney or consultant.

Reply #3

RJOh — Thu, 16 Jan 2014 20:52:17 GMT

I doubt if any winner would plan to spend every penny before the end of the year, besides even a mansion and other expensive stuff require funds for maintance. A mansion will generate a big tax bill every year you own it.

Reply #2

bigbear29 — Thu, 16 Jan 2014 20:41:32 GMT

Yes, that's what winners need to know before they buy the mansion, the expansive cars, the jet and so on.

Reply #1

RJOh — Thu, 16 Jan 2014 20:36:27 GMT

The amount of taxes withheld is never the complete amount owed, you'll know that at the end of the year when you calculate your taxes and file.

You win the powerball or mega millions, Taxes owned??

bigbear29 — Thu, 16 Jan 2014 20:26:44 GMT

Say you win 93 million, federal and your state taxes are taken out. Now for the next year, do you just own income taxes on what you received from your winnings? ( you did not work, you are retired )

Example: cash take home after lottery corporation takes federal and your state taxes out is 52 million. Now for the next year, you will have to pay 5.75% income taxes on the 52 million that you won in the previous year.

Does that sound close to being correct