How Much Taxes Do I have to Pay?Prev TopicNext Topic

• Brett

  

  cleveland
  United States
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  October 7, 2005
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  Dec 1, 2005, 5:26 am

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  I already searched the threads and I know the answer is somewhere, but I havent found it, maybe I'm blind. I want to know if an Ohio resident wins say $10,000 in the Pick 4 lottery, what percentage will they have to pay to taxes? I saw a thread that said something like 35% or 27% or something?   If thats true then thats a crime and the IRS should be brought up on criminal charges!     Especially when Canada doesn't have to pay any taxes. That isn't fair.        I could see maybe 5% or even 10%...... but 35%?????    Maybe Todd can get a petition going to eliminate taxes on lottery winnings under 10 grand.   
  
• Brett

  

  cleveland
  United States
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  October 7, 2005
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  Dec 1, 2005, 5:39 am

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    I forgot to mention that I did not actually win this amount, it's just a made upamount as an example.

    the lottery says its your responsibility to report your winnings to the IRS, but  if somebody gets a check cashed ,  does the place that cashes the check  report the amount  of money that you were given to the IRS?  Especially if you take a cash payment and dont deposit that money into your account?
  
• Todd

  

  50

  Chief Bottle Washer

  New Jersey
  United States
  Member #1
  May 31, 2000
  27,938 Posts
  Online
  Dec 1, 2005, 8:35 am

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  I sympathize, especially since my state (NJ) is free from state taxes on lottery prizes.

  Ohio withholds state taxes of 3.5% on big lottery prizes.  You can find that rate in a couple of places:

  • USA Mega - Mega Millions Jackpot Analysis page - http://www.usamega.com/mega-millions-jackpot.htm
  • USA Mega - Mega Millions FAQ page - http://www.usamega.com/mega-millions-faq.htm

   

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• MrBobb

  

  Alabama
  United States
  Member #17,829
  June 27, 2005
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  Dec 1, 2005, 10:46 am

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  Here's some information from the IRS. You can read the entire document by clicking on the link below:
  
  Instructions for Forms W-2G and 5754 - Main Contents
  
  Reportable Gambling Winnings
  
  Generally, gambling winnings are reportable if the amount paid reduced, at the option of the payer, by the wager is (a) $600 or more and (b) at least 300 times the amount of the wager...
  
  Withholding
  
  There are two types of withholding on gambling winnings: (1) regular gambling withholding at 25% (33.33% for certain noncash payments) and (2) backup withholding at 28%. If a payment is already subject to regular gambling withholding, it is not subject to backup withholding.
  
  Regular Gambling Withholding
  
  You may be required to withhold 25% of gambling winnings for federal income tax. This is referred to as regular gambling withholding. Withhold at the 25% rate if the winnings are more than $5,000 and are from:
  
  Sweepstakes, Wagering pools, Lotteries, and
  
  Other wagering transactions if the winnings are at least 300 times the amount wagered.
  
  Regular gambling withholding applies to the total amount of gross proceeds (the amount of winnings less the amount wagered), not merely to the amount in excess of $5,000...
  
  2. Sweepstakes, Wagering Pools, and Lotteries
  
  File Form W-2G for each person to whom you pay $600 or more in gambling winnings from a sweepstakes, wagering pool, or lottery (including a state-conducted lottery) if the winnings are at least 300 times the amount of the wager. The wager must be subtracted from the total winnings to determine whether withholding is required and, at the option of the payer, to determine whether reporting is required. The wager must be subtracted at the time of the first payment.
  
  Withholding
  
  You must withhold federal income tax, at the rate of 25% (regular gambling withholding), from the amount of winnings less the amount wagered if the winnings less the wager exceed $5,000...
  
  

   

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• RJOh

  

  100

  mid-Ohio
  United States
  Member #9
  March 24, 2001
  20,272 Posts
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  Dec 1, 2005, 11:08 am

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  Quote: Originally posted by Brett on December 1, 2005

    I forgot to mention that I did not actually win this amount, it's just a made upamount as an example.

    the lottery says its your responsibility to report your winnings to the IRS, but  if somebody gets a check cashed ,  does the place that cashes the check  report the amount  of money that you were given to the IRS?  Especially if you take a cash payment and dont deposit that money into your account?
  

  I won $1500 three years ago with OhioSuperLottoPlus and had to go to an approved bank to collect my money once I verified the hit at a local retailer.  For the required $10 fee the bank took care of all the reporting and I got a W-2G from the state at the end of the year which had to be included with my other tax forms.  Since I spent $3000 playing the lottery that year and could only claim $1500 of the lost which didn't increased the my standard amount allowed, I paid an extra $300 in federal and state taxes for extra income I really didn't make.

   * you don't need to buy every combination, just the winning ones * 

         
  
• four4me

  

  MD
  United States
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  June 18, 2003
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  Dec 1, 2005, 11:25 am

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  I think it any amount over 600.00 bucks. That is taxable income. regarded as unearned income. I don't know about Ohio's rules on this but most states have a couple options. pay the tax up front or have it withheld until the end of the year or quarter depending on your tax status. Some states may say said amount of taxes due within 90 days. here's the kicker. If you owe the state back taxes any fines or child support then be prepared to forfeit that amount from your winnings. If however you owe more than you won you might end up being taken to the jail house to be processed for failure to pay said fines.

  If your going to cash a winning lottery ticket at lottery HQ. Make sure there are no warrants for you. parking fines traffic citations etc etc. Because they have state police on site and you can and will be arrested if you are in violation of the law.

   
• RJOh

  

  100

  mid-Ohio
  United States
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  March 24, 2001
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  Dec 1, 2005, 11:32 am

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  In Ohio and I think other states too, your actual taxes on your lottery winnings is based on your total earnings for the whole year regardless of the amount that is withheld at the time you collect your winnings.

   * you don't need to buy every combination, just the winning ones * 

         
  
• four4me

  

  MD
  United States
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  June 18, 2003
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  Dec 1, 2005, 11:49 am

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  Quote: Originally posted by RJOh on December 1, 2005

  In Ohio and I think other states too, your actual taxes on your lottery winnings is based on your total earnings for the whole year regardless of the amount that is withheld at the time you collect your winnings.

  Right you are i tried to cash a 9000,00 scratch off and they said somthing to the fact that because i earned so much that they would take the taxes then and there. They wouldn't pay me the whole 9 grand. i protested their decision. But ended up taking the check for like around 6250.00. I got most of it back when i filed my taxes so in the long run it wasn't to bad of a deal. In a way it was better for me to let them take the taxes out instead of me having to write them a check for due taxes at tax time.