How will the new tax bill effect lottery winnings?Prev Topic Next Topic

New Topic New Poll

LiveInGreenBay

Green Bay
United States
Member #169,383
October 15, 2015
2,902 Posts
Offline

Dec 15, 2017, 2:41 pm

Anyone following the news knows about the new tax bill being voted on by Congress today. Supposedly it has huge tax breaks for businesses and people. I'm wondering if anyone knows how this effect lottery winnings. Will the feds tax lottery winnings less too?

Never give up.
Lynn2015

Huntersville,Nc.
United States
Member #167,627
July 24, 2015
2,819 Posts
Offline

Dec 15, 2017, 3:07 pm

Im following it Its going to hurt the lottery winners in the end.I feel its to make the rich richer.We need a tax break thats going to help all of us ..
LiveInGreenBay

Green Bay
United States
Member #169,383
October 15, 2015
2,902 Posts
Offline

Dec 15, 2017, 3:27 pm

Quote: Originally posted by Lynn2015 on Dec 15, 2017
Im following it Its going to hurt the lottery winners in the end.I feel its to make the rich richer.We need a tax break thats going to help all of us ..

Excuse me Lynn but aren't lottery winners considered rich?

Never give up.
KY Floyd

NY
United States
Member #23,834
October 16, 2005
4,777 Posts
Offline

Dec 15, 2017, 4:46 pm

"aren't lottery winners considered rich?"

It depends on how much they win.

The biggest chunk of PB, MM, and most state jackpot games goes to the jackpots, but overall most lottery prize money goes to relatively modest prizes. Winning 25, 50 or 100k is nice, but as a one time thing it's not going to come close to making you rich. If you were lower or middle class when you bought that winning ticket you'll still be lower or middle class after winning, and you're not one of the people the Republicans are most interested in helping out because you're not a significant job creator campaign contributor or post-political career employer. Your federal tax bill might go down a little bit, or it might go up a bit. That's true even if you don't win anything.

Even if you were one of the very few people to win a really large prize in a particular year you're still not getting any great help in the year that you win. Let's say that you win a $50 million cash prize. It looks like the final version of the tax plan reduces your federal bracket from 39.6 to 37%. If the whole $50 million was taxable you'd save 2.6% of $50 million and have an extra $1.3 million, but most winners pay state income tax on their prize. If that state tax is 6% you currently get a $3 million deduction because of it, and your federally taxable income would be $47 million resulting in an $18.612 million federal tax bill. Without that deduction for state taxes you'd pay the lower 37% rate on the full $50 million, for a tax bill of $18.5 million. You're still a bit ahead but that lower top rate has only saved you $112k instead of $1.3 million. Live in a state with a tax rate that's a bit more than 6.56%? Your federal tax bill will go up. There's also a new cap on the deduction for property taxes, so if your property tax bill is more than 10K that may also result in paying more.

OTOH, if you win a big prize and then die your heirs will get a nice break. Right now a married couple only owes estate tax on the value of their joint estate exceeding $10.9 million (meaning it doesn't affect the vast majority of people, including the owners of small businesses and small farms). That exemption will immediately double to #21.8 million, and be repealed completely in 2014. If the woman who won that record PB jackpot prize last August can stay alive for a bit over 6 years that's worth over $100 million to her heirs.
LiveInGreenBay

Green Bay
United States
Member #169,383
October 15, 2015
2,902 Posts
Offline

Dec 15, 2017, 5:18 pm

Quote: Originally posted by KY Floyd on Dec 15, 2017
"aren't lottery winners considered rich?"

It depends on how much they win.

The biggest chunk of PB, MM, and most state jackpot games goes to the jackpots, but overall most lottery prize money goes to relatively modest prizes. Winning 25, 50 or 100k is nice, but as a one time thing it's not going to come close to making you rich. If you were lower or middle class when you bought that winning ticket you'll still be lower or middle class after winning, and you're not one of the people the Republicans are most interested in helping out because you're not a significant job creator campaign contributor or post-political career employer. Your federal tax bill might go down a little bit, or it might go up a bit. That's true even if you don't win anything.

Even if you were one of the very few people to win a really large prize in a particular year you're still not getting any great help in the year that you win. Let's say that you win a $50 million cash prize. It looks like the final version of the tax plan reduces your federal bracket from 39.6 to 37%. If the whole $50 million was taxable you'd save 2.6% of $50 million and have an extra $1.3 million, but most winners pay state income tax on their prize. If that state tax is 6% you currently get a $3 million deduction because of it, and your federally taxable income would be $47 million resulting in an $18.612 million federal tax bill. Without that deduction for state taxes you'd pay the lower 37% rate on the full $50 million, for a tax bill of $18.5 million. You're still a bit ahead but that lower top rate has only saved you $112k instead of $1.3 million. Live in a state with a tax rate that's a bit more than 6.56%? Your federal tax bill will go up. There's also a new cap on the deduction for property taxes, so if your property tax bill is more than 10K that may also result in paying more.

OTOH, if you win a big prize and then die your heirs will get a nice break. Right now a married couple only owes estate tax on the value of their joint estate exceeding $10.9 million (meaning it doesn't affect the vast majority of people, including the owners of small businesses and small farms). That exemption will immediately double to #21.8 million, and be repealed completely in 2014. If the woman who won that record PB jackpot prize last August can stay alive for a bit over 6 years that's worth over $100 million to her heirs.

Sounds typically complicated. But I never saw the reasoning in that "estate tax" "death tax". Someone pays taxed their entire life on their money, investments and property. And what happens when they fukin die? The stinking government takes more of it. How in the world can that be justified?

Never give up.
music*

Fresno, California
United States
Member #157,849
August 2, 2014
3,959 Posts
Offline

Dec 15, 2017, 8:02 pm

I want the problems of a MM and PB winner. I will complain about the taxes after I see how much is left after paying them. Tonight's MM ATTH= $78 million Tomorrow's PB ATTH = $95 million.

ATTH is short for After-Tax Take Home. This applies to Washington State, California, Texas, and Florida.

Keep dreaming about how your retirement will be instantly funded by a win.

"We are all in this together!"
Sarge0202

United States
Member #180,287
February 28, 2017
201 Posts
Offline

Dec 16, 2017, 5:19 pm

Quote: Originally posted by LiveInGreenBay on Dec 15, 2017
Sounds typically complicated. But I never saw the reasoning in that "estate tax" "death tax". Someone pays taxed their entire life on their money, investments and property. And what happens when they fukin die? The stinking government takes more of it. How in the world can that be justified?

First, since I am pretty sure your "estate" is not worth more than 5.5 million, why care about those who do? They sure as hell don't care about you and your family.

Second, lets say by sheer luck (not skill) you estate happens to be one of the 0.2% of the estates that pay any tax, can you honestly say they your family can "barely survive" on 5+ million?!? You raised a foolish family. Lets go thru a typical scenario, you die at 75, you wife gets it all, tax free, she is taken care of. She dies later at age 76, that puts your kids in the 40's or 50's. Are you saying your lazy kids have been waiting around 40 - 50 years doing nothing but waiting till you die? You must be a great parent! No, if you have 5+ million in you estate, you send your kids to the greatest schools, and thru you business contacts with your gulf buddies at the Trump Golf Course you set them up in executive positions. Your family should already have their own lives and fortune.

The Estate Tax was set up by our Founding Fathers to prevent a plutocracy like they escaped from England. Many can argue we have it now. Estate taxes help prevent families that own empires (yes, I know they just raised the cap and not eliminated it, yet) like Walmart, go from generation to generation, doubling and tripling their wealth till the point comes that EVERY business, house, plot of land is owed by one of a couple dozen families. So much of for the American Dream, unless you are lucky enough to be born into one of those families.

Now here are the facts and stats about the current estate tax, before the proposed changes. This you won't see on Fox News or hear from Rush Windbag.

ONLY 0.1% to 0.2% of the estates are taxed.

If a family is "blessed" enough to be that wealthy, they average a payout of less then 17% of their total estate, due to lots of current loopholes.

Of the estates that were taxed, less then 1% were small businesses or family farms, and with proper planning most of the tax could be avoided.

For the larger estates, most of it is on "Unrealized Capital Gains" which is the capital gains tax they would have had to pay anyway if somebody sold off their estate just before dying. Mostly, Estate tax just collects the tax after they died. on stuff they should have paid before they died.

Since you chose the misnomer of "death tax", I know where you get your misinformation from, try googling up the truth for once.
EdG1955

Marana AZ
United States
Member #145,335
August 3, 2013
275 Posts
Offline

Dec 16, 2017, 5:40 pm

The estate tax and the gift tax are linked, so increasing the exclusion amount lets big lottery winners give away more money during their lifetime. When I win, I plan to give money to relatives and certain friends, so this will save quite a bit in taxes.
Sarge0202

United States
Member #180,287
February 28, 2017
201 Posts
Offline

Dec 16, 2017, 5:49 pm

Quote: Originally posted by music* on Dec 15, 2017
I want the problems of a MM and PB winner. I will complain about the taxes after I see how much is left after paying them. Tonight's MM ATTH= $78 million Tomorrow's PB ATTH = $95 million.

ATTH is short for After-Tax Take Home. This applies to Washington State, California, Texas, and Florida.

Keep dreaming about how your retirement will be instantly funded by a win.

And every year after that, if you invest properly, you only pay a capital gains of 25% on your Millions you earn sitting on the couch. 25% is the same marginal tax rate of a family WORKING and earning 200,000$ a year. Plus the WORKING family has to pay payroll taxes that a jackpot winner won't have to.
Coin Toss

Zeta Reticuli Star System
United States
Member #30,469
January 17, 2006
11,791 Posts
Offline

Dec 16, 2017, 9:12 pm

LiveInGreenBay,

Win a jackpot, then get concerned about it.

Those who run the lotteries love it when players look for consistency in something that's designed not to have any. So many systems, so many theories, so few jackpot winners.

There is one and only one 'proven' system, and that is to book the action. No matter the game, let the players pick their own losers.
Kyle7824

Greenville, NC
United States
Member #157,294
July 14, 2014
5,554 Posts
Offline

Dec 16, 2017, 9:18 pm

Quote: Originally posted by music* on Dec 15, 2017
I want the problems of a MM and PB winner. I will complain about the taxes after I see how much is left after paying them. Tonight's MM ATTH= $78 million Tomorrow's PB ATTH = $95 million.

ATTH is short for After-Tax Take Home. This applies to Washington State, California, Texas, and Florida.

Keep dreaming about how your retirement will be instantly funded by a win.

A pair from same group

a pair of Series

3 odd 3 even

4 odd 2 even

2 odd 4 even

spread out your #’s Delta System

The PB well anyone’s guess lol
LiveInGreenBay

Green Bay
United States
Member #169,383
October 15, 2015
2,902 Posts
Offline

Dec 17, 2017, 12:21 pm

Quote: Originally posted by Sarge0202 on Dec 16, 2017
First, since I am pretty sure your "estate" is not worth more than 5.5 million, why care about those who do? They sure as hell don't care about you and your family.

Second, lets say by sheer luck (not skill) you estate happens to be one of the 0.2% of the estates that pay any tax, can you honestly say they your family can "barely survive" on 5+ million?!? You raised a foolish family. Lets go thru a typical scenario, you die at 75, you wife gets it all, tax free, she is taken care of. She dies later at age 76, that puts your kids in the 40's or 50's. Are you saying your lazy kids have been waiting around 40 - 50 years doing nothing but waiting till you die? You must be a great parent! No, if you have 5+ million in you estate, you send your kids to the greatest schools, and thru you business contacts with your gulf buddies at the Trump Golf Course you set them up in executive positions. Your family should already have their own lives and fortune.

The Estate Tax was set up by our Founding Fathers to prevent a plutocracy like they escaped from England. Many can argue we have it now. Estate taxes help prevent families that own empires (yes, I know they just raised the cap and not eliminated it, yet) like Walmart, go from generation to generation, doubling and tripling their wealth till the point comes that EVERY business, house, plot of land is owed by one of a couple dozen families. So much of for the American Dream, unless you are lucky enough to be born into one of those families.

Now here are the facts and stats about the current estate tax, before the proposed changes. This you won't see on Fox News or hear from Rush Windbag.

ONLY 0.1% to 0.2% of the estates are taxed.

If a family is "blessed" enough to be that wealthy, they average a payout of less then 17% of their total estate, due to lots of current loopholes.

Of the estates that were taxed, less then 1% were small businesses or family farms, and with proper planning most of the tax could be avoided.

For the larger estates, most of it is on "Unrealized Capital Gains" which is the capital gains tax they would have had to pay anyway if somebody sold off their estate just before dying. Mostly, Estate tax just collects the tax after they died. on stuff they should have paid before they died.

Since you chose the misnomer of "death tax", I know where you get your misinformation from, try googling up the truth for once.

Hey Sarge, you call it what you want and I'll call it what I want, OK. Can't help but notice you seem to have a real hatred of "rich people". Not to fear Sarge, I'm sure after the tax bill is passed, you'll still be receiving your welfare payments. If you play the lottery, my only question is, why?

Never give up.
Sarge0202

United States
Member #180,287
February 28, 2017
201 Posts
Offline

Dec 17, 2017, 5:37 pm

Quote: Originally posted by LiveInGreenBay on Dec 17, 2017
Hey Sarge, you call it what you want and I'll call it what I want, OK. Can't help but notice you seem to have a real hatred of "rich people". Not to fear Sarge, I'm sure after the tax bill is passed, you'll still be receiving your welfare payments. If you play the lottery, my only question is, why?

The only welfare I will be able to get now is I will FINALLY be able to write off my private jet maintenance! The whole tax bill is corporate welfare that will increase the deficit by the hypocritical party that only cares about deficits when the other party is in charge.

I play the lottery because I like a math challenge.

Oh and Sieg Heils!
DELotteryPlyr

Maryland
United States
Member #162,427
January 2, 2015
3,211 Posts
Offline

Dec 20, 2017, 2:35 pm

At&T just announced the following

AT&T is giving $1,000 bonuses to 200,000 employees after tax bill (unions employees)

AT&T was quick to respond to news of U.S. tax reform, announcing it would give some employees bonuses once the law is official. Also mentioned a $1 BILLION investment increase in America (but I missed the details on that part)
Sarge0202

United States
Member #180,287
February 28, 2017
201 Posts
Offline

Dec 20, 2017, 8:47 pm

Quote: Originally posted by DELotteryPlyr on Dec 20, 2017
At&T just announced the following

AT&T is giving $1,000 bonuses to 200,000 employees after tax bill (unions employees)

AT&T was quick to respond to news of U.S. tax reform, announcing it would give some employees bonuses once the law is official. Also mentioned a $1 BILLION investment increase in America (but I missed the details on that part)

And they are still $3,000 short of what the Republicans promised!

New Topic New Poll

Subscribe to this topic

How will the new tax bill effect lottery winnings?Prev TopicNext Topic

How will the new tax bill effect lottery winnings?Prev Topic Next Topic