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Question about Taxes

Topic closed. 5 replies. Last post 7 years ago by time*treat.

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rundown99's avatar - cigar

United States
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August 14, 2002
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Posted: August 13, 2009, 10:07 am - IP Logged

I have a question.  Does anyone know about the situation regarding taxes concerning the grand prize of a lottery game such as powerball or mega millions?

 

If someone won a powerball/mega millions jackpot grand prize, would the lottery take the required amount of federal and state taxes IMMEDIATELY before sending the money to the winner or would the winner receive the ENTIRE lump sum after claiming the prize and then pay off the taxes on his or her own?  I didn't know if any of you knew about this, so I wanted to ask all of you about it.  Thank you in advance for your response.

Smart lottery winners form trust to claim their winnings.  They send an attorney to the lottery headquarters to claim the prize in trust, so that ONLY the name of the trust is revealed.  And they tell NO ONE, especially relatives.

If you ever win a lottery and you are single, the only person you should ever marry is someone who was truly in love with you BEFORE you won the jackpot!

    pigsNtrees's avatar - pigsNtrees
    Mallorn trees of Lothlorien
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    November 14, 2005
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    Posted: August 13, 2009, 10:33 am - IP Logged

    Short answer YES.

    This is from

    Mega Millions Jackpot Analysis

    http://www.usamega.com/mega-millions-jackpot.asp 

    Under Important Notes it says….

    All of the tax amounts listed above are the taxes withheld at the time of the prize award.(25%)

    State lotteries typically deduct other amounts from prize payments, such as child support payments, back taxes owed, outstanding student loans, and other government agency responsibilities.

    Quando Porca Volare!

    drunk hobbit

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      March 9, 2006
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      Posted: August 13, 2009, 2:35 pm - IP Logged

      What a slacker!  You have been a forum member since 2002, and this topic has been discussed in NUMEROUS threads.  How hard would it be to fill out a faux 1040 with a multi-million income amount to determine the tax obligation?

        Raven62's avatar - binary
        New Jersey
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        June 28, 2005
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        Posted: August 13, 2009, 3:46 pm - IP Logged

        I have a question.  Does anyone know about the situation regarding taxes concerning the grand prize of a lottery game such as powerball or mega millions?

         

        If someone won a powerball/mega millions jackpot grand prize, would the lottery take the required amount of federal and state taxes IMMEDIATELY before sending the money to the winner or would the winner receive the ENTIRE lump sum after claiming the prize and then pay off the taxes on his or her own?  I didn't know if any of you knew about this, so I wanted to ask all of you about it.  Thank you in advance for your response.

        You'll Find the Answer Here!

        A mind once stretched by a new idea never returns to its original dimensions!

          rundown99's avatar - cigar

          United States
          Member #567
          August 14, 2002
          484 Posts
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          Posted: August 13, 2009, 11:10 pm - IP Logged

          What a slacker!  You have been a forum member since 2002, and this topic has been discussed in NUMEROUS threads.  How hard would it be to fill out a faux 1040 with a multi-million income amount to determine the tax obligation?

          The previous discussions about taxes were about how much federal and state taxes were and which states taxed you.  But the discussions were not about whether the lottery instantly deducted the tax amount from the prize or if the winner needed to pay it on their own.

          Smart lottery winners form trust to claim their winnings.  They send an attorney to the lottery headquarters to claim the prize in trust, so that ONLY the name of the trust is revealed.  And they tell NO ONE, especially relatives.

          If you ever win a lottery and you are single, the only person you should ever marry is someone who was truly in love with you BEFORE you won the jackpot!

            time*treat's avatar - radar

            United States
            Member #13130
            March 30, 2005
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            Posted: August 14, 2009, 3:19 pm - IP Logged

            I have a question.  Does anyone know about the situation regarding taxes concerning the grand prize of a lottery game such as powerball or mega millions?

             

            If someone won a powerball/mega millions jackpot grand prize, would the lottery take the required amount of federal and state taxes IMMEDIATELY before sending the money to the winner or would the winner receive the ENTIRE lump sum after claiming the prize and then pay off the taxes on his or her own?  I didn't know if any of you knew about this, so I wanted to ask all of you about it.  Thank you in advance for your response.

            The lottery takes out only PART of the taxes you owe, at the beginning.

            The lottery withholds 25% for federal taxes before sending you anything.

            The state portion will vary by state whether or not it's taken right away.
            DC recently changed their rules -- http://www.lotterypost.com/news/193354

            Your federal tax total will likely be over 30%, so you will have a "balance" on your federal tax to pay.

            In neo-conned Amerika, bank robs you.
            Alcohol, Tobacco, and Firearms should be the name of a convenience store, not a govnoment agency.