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Winning the Lottery and taxes

Topic closed. 14 replies. Last post 12 years ago by TNPATL.

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New York, NY
United States
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April 7, 2005
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Posted: April 12, 2005, 12:47 pm - IP Logged

I'm curious. I know when you win State and Federal take their portion off the topc, but how would winning for example (I live in Atlanta) a Fantasy 5 jackpot for let's say $80,000 grand affect a person when they file their taxes? I know the lottery commision reports when a person wins.



No I have not won......YET, but I was curious.




    United States
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    Posted: April 12, 2005, 1:36 pm - IP Logged

    Just make sure you save all your losers for the year. So when you do win you have a bag of losers you can write off the next year. I was at horse track SAturday and I picked up a few big losing tickets just in case.  Nice to show a years worth of tickets than just tickets dated after you won the jackpot to show you truly did play the lottery all year long.  That away in the case you mentioined of winning say 80 where approx 24k or so is right off the top, you can get money back at end of year.  Lets hope it does happen.

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      New York, NY
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      Posted: April 12, 2005, 4:49 pm - IP Logged

      I did not realize you could write off losing tickets if you win. Cool!!! Thanks for letting me know.

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        Morrison, IL
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        Posted: April 12, 2005, 5:22 pm - IP Logged

          You can only write off losing tickets if you itemize deductions though.

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          MA
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          February 14, 2005
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          Posted: April 12, 2005, 11:07 pm - IP Logged

          And deductions vary by state. You can't deduct your losers in MA, for example.



          If you win $80,000 the lottery will withhold 25% for the feds, and maybe an additional percentage for the state. They'll give you a W2 (actually, a W-2G, but it acts the same), and you just figure your taxes like normal, with this W2 plus the one from your job.



          If you win less than $5k but more than $600, it's a little trickier. They give you a W2, but don't withhold anything. Which means you probably have to pay estimated taxes. But maybe not. Anyway, it's something to look out for.

            GoArmy's avatar - redcross
            Waukegan, IL
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            Posted: April 12, 2005, 11:15 pm - IP Logged

            Just make sure you save all your losers for the year. So when you do win you have a bag of losers you can write off the next year.

            They'll give you a W2 (actually, a W-2G, but it acts the same), and you just figure your taxes like normal, with this W2 plus the one from your job

            If you win less than $5k but more than $600, it's a little trickier. They give you a W2, but don't withhold anything. Which means you probably have to pay estimated taxes. But maybe not. Anyway, it's something to look out for.

            TN both of the top two sentences are correct, your W-2G will look strange because it is probably smaller then the lottery ticket that you won on (make sure that you keep both of these for the end of the year). Bingo, you will still have to pay the federal taxes but say you win 4 grand, you will have to pay for that at the end of the year. Where you can make out is when they try to get their grand or so you can present them with the losing tickets like "gut" was talking about. As long as you have a grand worth of losers then you wont pay the taxes on it.

              ineed9million's avatar - scene sunovermountains.jpg
              Philadelphia, PA
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              Posted: April 12, 2005, 11:19 pm - IP Logged

              this is good info.

                LOTTOMIKE's avatar - cash money.jpg
                Tennessee
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                October 15, 2004
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                Posted: April 13, 2005, 6:31 am - IP Logged

                ok here is a real good question for everybody....say you win 8 cash 4 drawings at 2,500 a winning ticket for a grand total of 20,000 dollars won that year...how much taxes do you pay all together????

                  four4me's avatar - gate1
                  MD
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                  Posted: April 13, 2005, 10:44 am - IP Logged

                  i understand about keeping a log. my tickets have codes on them from the site that they were purchased they contain the date.  There are tax clauses for claiming gambling wins and losses. if you itemize deductions. Unless your tax forms contain information that might ring a bell with an irs tax employee you should be ok. Something like claiming 5000 dollars in losses on a 6000 win within a 30 day period would ring such a bell. They know nobody is going to spend 5000 on lottery tickets in a 30 day period.

                    Lottery_Analyst's avatar - Batman
                    Georgia
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                    Posted: April 13, 2005, 11:08 am - IP Logged

                    Hi four4me,

                    Glad to hear that you understand about the need for keeping a log.  I just wanted to make sure that everyone else understood.  True the Lottery ticket has the vendor code and date where you bought the ticket, but the IRS does require name or names of witnesses and additional info.  I buy my tickets at the same store each evening and know the shop owner and he is my witness.  I am studying now to get my CPA and I have a CPA friend that told me last year that he had two clients that had lottery and gambling deductions disallowed because they did not keep a log.  They came to him for help because they were audited.  He did not do their tax returns, they did them on their own.

                    For me it is worth the extra 5 minutes to record all my playing data in my log.  It paid off for me when I won before and I am hoping it will again soon.

                    Thanks,

                    John - LA


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                      Posted: April 13, 2005, 12:03 pm - IP Logged

                      Here's a question on the same subject if you won a $3 million Jackpot in FL and chose

                      the "Annuity" which is 30 yrs how much would you recieve each year I figured out around $144,000/yr correct me if I'm wrong.


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                        Posted: April 13, 2005, 12:05 pm - IP Logged

                        p4:

                        3m/30=100k/yr.


                          United States
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                          Posted: April 13, 2005, 12:12 pm - IP Logged

                          Thanks "CASH ONLY" my math is a little rusty I was $44,000 off


                            United States
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                            Posted: April 13, 2005, 12:13 pm - IP Logged

                            Now is that after taxes?

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                              New York, NY
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                              Posted: April 13, 2005, 4:20 pm - IP Logged

                              Some good information has been provided!! Thank you!!!