|Posted: June 16, 2008, 1:44 am - IP Logged|
if the JACKPOT is 15,000,000.00 and it says the PAYOUT is 8,500,000.00 does that mean payout after taxes? and how much would they take out if you take the lump sum? those are two things i never did understand.
I doubt if any jackpot or lump sum is ever advertised as "after tax" for the simple reason that everyone will have a different tax obligation.
From your example (an $8.5M payout for a $15M jackpot) I'm assuming that no taxes are being considered at all. After all, that's almost 57% of the estimated jackpot. If you are talking about a jackpot that a state is advertising, as I first said, the federal and state taxes are never deducted. For example, how would they know in advance how many winners there will be?
Regarding a lump sum payout, in FL it ranges from 55% to over 60% on Lotto. A lump sum is always the amount that the lottery would need to invest to reach the total jackpot.
"how much would they take out if you take the lump sum?"
AFAIK the IRS dictates that they must deduct 25%. Some states also deduct state tax. The best suggestion I have is to read the FAQs posted on your state lottery site.