Benedict College gets a big financial boost, courtesy of a Kentucky lottery winner who knows the South Carolina school quite well.
Charlie Johnson is a highly successful business owner in Louisville, Kentucky. He is president and CEO of Active Transportation, a company that moves new cars and trucks from assembly plants to dealers.
But at Benedict College, they know Johnson as the board of trustees chair, and the donor who paid for scholarships, provided buses for the football team, and threw in the first million dollars to build the school's new stadium complex.
Now, add one more title to Johnson's resume. He is a winner in the Kentucky Powerball Lottery.
When Benedict's president David Swinton first learned Johnson's plan, he couldn't believe it, "He said, 'Guess what? I won the lottery and I want to give it to the college."
But Johnson puts it simply, "I bought the lottery ticket for Benedict College and the ticket came through for $200,000."
And Wednesday in Louisville, Johnson turned the prize money over to Benedict president Dr. David Swinton. The check presented to the school was written for $200,003.
During a news conference, Swinton indicated the money would be used to help complete the stadium. It's still under construction on a site near Two Notch Road in Columbia. The stadium will have a capacity of 10,000 spectators and will be finished in November. The project will soon bear Johnson's name.
Johnson has a professional football background. He played defensive tackle for the San Francisco 49ers before being traded to the Baltimore Colts. He has a Super Bowl ring. Johnson played for the Colts at the time of Super Bowl V, which ended with a 16-13 win over the Dallas Cowboys.
The other important thing about this story, that is really unspoken in the article, is about taxes.
Everyone always complains about "why do you always show the taxes that are withheld by the lottery instead of the 39% that the winner will eventually have to pay?"
Well, this story is a great illustration of why we do that.
This guy is paying zero taxes on his prize, because it's all going to a tax-deductable donation. That's why we only show the amount withheld -- because the final disposition of taxes -- whether or not they will have to pay 39%, 36%, or whatever -- depends on what they do with the money.
I wish I had built the feature that was recommended earlier today for bookmarking a topic thread, because I could just point people back to this news story every time someone asks that question. (And asks, and asks, and asks.)
angelm - you are right, seeing as I am from Louisville originally, and my dad went to school in Richmond @ EKU.
Todd - yeah, it is a great story. I wish I could afford one day to do something like that for my high school or for Univ. of North Carolina (not like they don't have enough money as it is!)
Just goes to show you that the winning tickets sometimes go to the (ultimately ) fortunate ones- kinda like the guy that filed Bankruptcy last summer hitting the Powerball back in December.
The other important thing about this story, that is really unspoken in the article, is about taxes.
Everyone always complains about "why do you always show the taxes that are withheld by the lottery instead of the 39% that the winner will eventually have to pay?"
Well, this story is a great illustration of why we do that.
This guy is paying zero taxes on his prize, because it's all going to a tax-deductable donation. That's why we only show the amount withheld -- because the final disposition of taxes -- whether or not they will have to pay 39%, 36%, or whatever -- depends on what they do with the money.
I wish I had built the feature that was recommended earlier today for bookmarking a topic thread, because I could just point people back to this news story every time someone asks that question. (And asks, and asks, and asks.)
HAPPY FRIDAY...TODD...1/13/2006
HOWEVER.....and by the same token.....he is already a Wealthy Businessman, who can well afford to give his entire prize winnings to a "tax-deductible cause". Naturally, he'll not have to pay taxes on a "prize" he's giving away......but those among us who aren't already "wealthy" will certainly not give all the $$$$$$$ away.......Therefore, it's good to see whatever percentage the winnner would eventually have to pay for tax purposes. It benefits in the short term, because it could possibly incourage winners to give "more" to charity, or those charities that need the greater support. Therefore, it remains a good ????
Understood, but the point being that the only reliable and always-correct number to give to people is the amount withheld by the lottery.
You'd be surprised how many people incorrectly say that the amounts on the Jackpot Analysis pages at USA Mega are wrong. They say that the real amount is something like 39%, but they are not correct. The amounts listed on those pages -- 25% Federal, plus whatever the states withhold -- are the correct numbers, and then naturally people have to pay more or less than that on April 15, depending on what they did with the prize money.
Again, the point is that when people say the taxes on lottery prizes amount to 39%, that is wrong. For some people it may be 39%, but making a blanket statement that it is 39% is wrong.
Understood, but the point being that the only reliable and always-correct number to give to people is the amount withheld by the lottery.
You'd be surprised how many people incorrectly say that the amounts on the Jackpot Analysis pages at USA Mega are wrong. They say that the real amount is something like 39%, but they are not correct. The amounts listed on those pages -- 25% Federal, plus whatever the states withhold -- are the correct numbers, and then naturally people have to pay more or less than that on April 15, depending on what they did with the prize money.
Again, the point is that when people say the taxes on lottery prizes amount to 39%, that is wrong. For some people it may be 39%, but making a blanket statement that it is 39% is wrong.
I hope someday I win enough money to HAVE to pay 39%.
The other important thing about this story, that is really unspoken in the article, is about taxes.
Everyone always complains about "why do you always show the taxes that are withheld by the lottery instead of the 39% that the winner will eventually have to pay?"
Well, this story is a great illustration of why we do that.
This guy is paying zero taxes on his prize, because it's all going to a tax-deductable donation. That's why we only show the amount withheld -- because the final disposition of taxes -- whether or not they will have to pay 39%, 36%, or whatever -- depends on what they do with the money.
I wish I had built the feature that was recommended earlier today for bookmarking a topic thread, because I could just point people back to this news story every time someone asks that question. (And asks, and asks, and asks.)
This story isn't any different than most as far as what it says about taxes, leaving it up to the reader to find out the truth on their own. Although it's in the fine print at the bottom of the page, you clearly say that the withholdings and the actual taxes owed are different things. Very few articles mention anything about the actual tax obligations, and many will say something along the lines of "after taxes, the money would come to $7.6 million a year for 30 years or a lump sum of $110 million," "winnings will be paid in one lump sum of $681,500" or "waiting until after Jan. 1 to claim the lump-sum payment of $54.8 million, thus postponing the $16.4 million tax bill until December 2006". Was the last one written by a reporter who doesn't even know that taxes will be withheld, or that the filing date for 2006 will be (duh) April 15, 2007? The first says "after taxes" not "after withholdings." Since it represents 34% in a state with an 8% maximum rate I'd say it's clearly wrong about what the actual "tax bill" will be.
The first is actually pretty close to what the winner is likely to net because on a million dollars about 35 to 40% will be taxed at lower rates (depending on what their other income is), but for most winners of big jackpots most of their income will be taxed at the highest rate. You've said elsewhere that most people don't understand taxes and that's certainly true. The vast majority of people don't have any reason to be paying much attention to how much tax you'd actually pay on a million dollars of taxable income, much less 54 million, but unless you've ever filed your return and not owed anything but also not gotten a refund you should know that withholdings and your actual taxes are different.
Giving money to charity is great, but just like taxes it reduces the amount of money you have, so in that sense the reduction in taxes doesn't mean much in terms of how much your winnings are reduced. It would be a refreshing change of pace if just once a press release said something along the lines of "the winner took the lump sum of 30 million, but they could be left with as little as 17 million after paying state and federal taxes." Except for the amount won, that's much more representative of what will happen to most winners of a big jackpot than the stories we normally see.
You say that "the reduction in taxes doesn't mean much in terms of how much your winnings are reduced" but there is not just charity. That can be one of the biggest things, but there are MANY other factors that can reduce taxes for SMART winners.
Note, I'm specifically talking about winners who consult with a tax attorney BEFORE claiming the prize.
It's important to note that many winners get a big chunk of the withholding back as a refund IF they get the good tax advice. That is ignored so much by people who complain about about the withholding. Not everyone has to make tons of charitable contributions in order to get refunds .... existing circumstances (medical bills, child deductions, mortgage payments, business expenses) often count for the bulk of the refunds. But again, the importance of getting professional advice can't be stressed enough.
Understood, but the point being that the only reliable and always-correct number to give to people is the amount withheld by the lottery.
You'd be surprised how many people incorrectly say that the amounts on the Jackpot Analysis pages at USA Mega are wrong. They say that the real amount is something like 39%, but they are not correct. The amounts listed on those pages -- 25% Federal, plus whatever the states withhold -- are the correct numbers, and then naturally people have to pay more or less than that on April 15, depending on what they did with the prize money.
Again, the point is that when people say the taxes on lottery prizes amount to 39%, that is wrong. For some people it may be 39%, but making a blanket statement that it is 39% is wrong.
HAPPY SATURDAY "TODD"
I can appreciate your point.....especially as some States don't have an "income tax" such as Nevada.....
angelm - you are right, seeing as I am from Louisville originally, and my dad went to school in Richmond @ EKU.
Todd - yeah, it is a great story. I wish I could afford one day to do something like that for my high school or for Univ. of North Carolina (not like they don't have enough money as it is!)
A building on the campus on UNC-Chapel Hill was built with public lottery money many many years ago and I forgot which one Yale or Princeton was started on public lottery money.
I bet Kentucky is pretty stewed up that the money is going to the SOUTH CAROLINA college system....hahaha . What a slap in the face!
Isn't it a great story though?
The other important thing about this story, that is really unspoken in the article, is about taxes.
Everyone always complains about "why do you always show the taxes that are withheld by the lottery instead of the 39% that the winner will eventually have to pay?"
Well, this story is a great illustration of why we do that.
This guy is paying zero taxes on his prize, because it's all going to a tax-deductable donation. That's why we only show the amount withheld -- because the final disposition of taxes -- whether or not they will have to pay 39%, 36%, or whatever -- depends on what they do with the money.
I wish I had built the feature that was recommended earlier today for bookmarking a topic thread, because I could just point people back to this news story every time someone asks that question. (And asks, and asks, and asks.)
Proves that there are good folks in Ky.!!
angelm - you are right, seeing as I am from Louisville originally, and my dad went to school in Richmond @ EKU.
Todd - yeah, it is a great story. I wish I could afford one day to do something like that for my high school or for Univ. of North Carolina (not like they don't have enough money as it is!)
If you already got the money you need, why not?
It was a good thing to do.
great story
I'm impressed.
Just goes to show you that the winning tickets sometimes go to the (ultimately ) fortunate ones- kinda like the guy that filed Bankruptcy last summer hitting the Powerball back in December.
That was a cool story. Kudos to that WINNER in life, not money.
This is nice to see.
I very much doubt I'd be so noble.
Nicey, Nice! How about donating to your favorite charity. If you have the money to do it with, go for it. Now, my Alma Mater...
Isn't it a great story though?
The other important thing about this story, that is really unspoken in the article, is about taxes.
Everyone always complains about "why do you always show the taxes that are withheld by the lottery instead of the 39% that the winner will eventually have to pay?"
Well, this story is a great illustration of why we do that.
This guy is paying zero taxes on his prize, because it's all going to a tax-deductable donation. That's why we only show the amount withheld -- because the final disposition of taxes -- whether or not they will have to pay 39%, 36%, or whatever -- depends on what they do with the money.
I wish I had built the feature that was recommended earlier today for bookmarking a topic thread, because I could just point people back to this news story every time someone asks that question. (And asks, and asks, and asks.)
HAPPY FRIDAY...TODD...1/13/2006
HOWEVER.....and by the same token.....he is already a Wealthy Businessman, who can well afford to give his entire prize winnings to a "tax-deductible cause". Naturally, he'll not have to pay taxes on a "prize" he's giving away......but those among us who aren't already "wealthy" will certainly not give all the $$$$$$$ away.......Therefore, it's good to see whatever percentage the winnner would eventually have to pay for tax purposes. It benefits in the short term, because it could possibly incourage winners to give "more" to charity, or those charities that need the greater support. Therefore, it remains a good ????
Understood, but the point being that the only reliable and always-correct number to give to people is the amount withheld by the lottery.
You'd be surprised how many people incorrectly say that the amounts on the Jackpot Analysis pages at USA Mega are wrong. They say that the real amount is something like 39%, but they are not correct. The amounts listed on those pages -- 25% Federal, plus whatever the states withhold -- are the correct numbers, and then naturally people have to pay more or less than that on April 15, depending on what they did with the prize money.
Again, the point is that when people say the taxes on lottery prizes amount to 39%, that is wrong. For some people it may be 39%, but making a blanket statement that it is 39% is wrong.
Understood, but the point being that the only reliable and always-correct number to give to people is the amount withheld by the lottery.
You'd be surprised how many people incorrectly say that the amounts on the Jackpot Analysis pages at USA Mega are wrong. They say that the real amount is something like 39%, but they are not correct. The amounts listed on those pages -- 25% Federal, plus whatever the states withhold -- are the correct numbers, and then naturally people have to pay more or less than that on April 15, depending on what they did with the prize money.
Again, the point is that when people say the taxes on lottery prizes amount to 39%, that is wrong. For some people it may be 39%, but making a blanket statement that it is 39% is wrong.
I hope someday I win enough money to HAVE to pay 39%.
Isn't it a great story though?
The other important thing about this story, that is really unspoken in the article, is about taxes.
Everyone always complains about "why do you always show the taxes that are withheld by the lottery instead of the 39% that the winner will eventually have to pay?"
Well, this story is a great illustration of why we do that.
This guy is paying zero taxes on his prize, because it's all going to a tax-deductable donation. That's why we only show the amount withheld -- because the final disposition of taxes -- whether or not they will have to pay 39%, 36%, or whatever -- depends on what they do with the money.
I wish I had built the feature that was recommended earlier today for bookmarking a topic thread, because I could just point people back to this news story every time someone asks that question. (And asks, and asks, and asks.)
This story isn't any different than most as far as what it says about taxes, leaving it up to the reader to find out the truth on their own. Although it's in the fine print at the bottom of the page, you clearly say that the withholdings and the actual taxes owed are different things. Very few articles mention anything about the actual tax obligations, and many will say something along the lines of "after taxes, the money would come to $7.6 million a year for 30 years or a lump sum of $110 million," "winnings will be paid in one lump sum of $681,500" or "waiting until after Jan. 1 to claim the lump-sum payment of $54.8 million, thus postponing the $16.4 million tax bill until December 2006". Was the last one written by a reporter who doesn't even know that taxes will be withheld, or that the filing date for 2006 will be (duh) April 15, 2007? The first says "after taxes" not "after withholdings." Since it represents 34% in a state with an 8% maximum rate I'd say it's clearly wrong about what the actual "tax bill" will be.
The first is actually pretty close to what the winner is likely to net because on a million dollars about 35 to 40% will be taxed at lower rates (depending on what their other income is), but for most winners of big jackpots most of their income will be taxed at the highest rate. You've said elsewhere that most people don't understand taxes and that's certainly true. The vast majority of people don't have any reason to be paying much attention to how much tax you'd actually pay on a million dollars of taxable income, much less 54 million, but unless you've ever filed your return and not owed anything but also not gotten a refund you should know that withholdings and your actual taxes are different.
Giving money to charity is great, but just like taxes it reduces the amount of money you have, so in that sense the reduction in taxes doesn't mean much in terms of how much your winnings are reduced. It would be a refreshing change of pace if just once a press release said something along the lines of "the winner took the lump sum of 30 million, but they could be left with as little as 17 million after paying state and federal taxes." Except for the amount won, that's much more representative of what will happen to most winners of a big jackpot than the stories we normally see.
You say that "the reduction in taxes doesn't mean much in terms of how much your winnings are reduced" but there is not just charity. That can be one of the biggest things, but there are MANY other factors that can reduce taxes for SMART winners.
Note, I'm specifically talking about winners who consult with a tax attorney BEFORE claiming the prize.
It's important to note that many winners get a big chunk of the withholding back as a refund IF they get the good tax advice. That is ignored so much by people who complain about about the withholding. Not everyone has to make tons of charitable contributions in order to get refunds .... existing circumstances (medical bills, child deductions, mortgage payments, business expenses) often count for the bulk of the refunds. But again, the importance of getting professional advice can't be stressed enough.
Understood, but the point being that the only reliable and always-correct number to give to people is the amount withheld by the lottery.
You'd be surprised how many people incorrectly say that the amounts on the Jackpot Analysis pages at USA Mega are wrong. They say that the real amount is something like 39%, but they are not correct. The amounts listed on those pages -- 25% Federal, plus whatever the states withhold -- are the correct numbers, and then naturally people have to pay more or less than that on April 15, depending on what they did with the prize money.
Again, the point is that when people say the taxes on lottery prizes amount to 39%, that is wrong. For some people it may be 39%, but making a blanket statement that it is 39% is wrong.
HAPPY SATURDAY "TODD"
I can appreciate your point.....especially as some States don't have an "income tax" such as Nevada.....
angelm - you are right, seeing as I am from Louisville originally, and my dad went to school in Richmond @ EKU.
Todd - yeah, it is a great story. I wish I could afford one day to do something like that for my high school or for Univ. of North Carolina (not like they don't have enough money as it is!)
Tenaj - which building was it? Might have been after I graduated ('90).