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payout/jackpot question

Topic closed. 4 replies. Last post 8 years ago by justxploring.

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United States
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June 4, 2008
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Posted: June 15, 2008, 10:34 pm - 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.

    ptcruiser70's avatar - Lottery-008.jpg
    roanoke
    United States
    Member #61831
    June 6, 2008
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    Posted: June 15, 2008, 10:37 pm - IP Logged

    hay blackblue thats just the offer before taxes so would walk away with about 5million 700 000

      djklaugh's avatar - Lottery-031.jpg
      Portland,Oregon
      United States
      Member #14387
      April 25, 2005
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      Posted: June 16, 2008, 12:04 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.

      Blackblue

       There are two ways to collect most jackpots (ie MegaMillions or Powerball and most state lotteries) - either by taking it as an annuity that pays out over a certain number of years (25 years for Megamillions and 30 for Powerball - check your own state's lottery website to see what their deal is). Or you can take a cash option which pays you the amount of money the lottery organization would put into an annuity to generate the payouts over their particular time span.  It is not exactly half of the the total jackpot amount ... but usually is about 47-48% of the jackpot depending on which lottery.  Then they take out taxes ... 25% for the feds and then what ever state tax your state has .... the USAMega site does a great jackpot analysis for MegaMillions and Powerball ... there's the site for the next Powerball drawing. Check under the listing for which ever state you buy tickets in for a payout schedule for the annuity and for how much tax would be withheld for state taxes.

       

       http://www.usamega.com/powerball-jackpot.htm

      Djklaugh

        Some things have to be believed to be seen.

      "I have not failed. I have just found ten thousand things that don't work".  Thomas Edison

        guesser's avatar - Lottery-017.jpg

        United States
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        June 16, 2006
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        Posted: June 16, 2008, 1:23 am - IP Logged

        a 360 (380?) mill jackpot in Neb was split between 8 players, who went in on the ticket together, and each one took home about 15.4 mill.

        Go figure...

        I understand if you were to win 15 mill, you would get about 45-48% of that amount.

        It may depend on the State you are in...

          justxploring's avatar - villiarna
          Wandering Aimlessly
          United States
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          November 5, 2005
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          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.