Biggest reason for Lottery Winners going broke soon? :/Prev Topic Next Topic

New Topic New Poll

Lotto fanatic

United States
Member #221,636
March 29, 2022
104 Posts
Offline

Jan 11, 2023, 4:24 am

Now, I remember thinking that the biggest reason for Lottery Winners going broke soon was because of giving money to a bunch of people who ask them for money, such as Friends and Family, but it actually turns out that the biggest reason for Lottery Winners going broke soon is actually tax problems. I remember thinking you only get taxed once and then never again, but you actually get taxed twice. A lot of Lottery Winners assume that they only get taxed once and are stunned when they get taxed again. So, taxes are actually the biggest reason Lottery Winners go broke soon. :/
zephbe

South Carolina
United States
Member #77,163
July 15, 2009
962 Posts
Offline

Jan 11, 2023, 6:57 am

Give me an example of a person who won a jackpot and went broke from taxes on the winnings. What it sounds like you are saying is the taxes on a jackpot are more than the amount won--and that is not true.

Every champion was once a contender who refused to give up.-Rocky Balboa

“Don’t let someone who gave up on their dreams talk you out of going after yours.” – Zig Ziglar
Artist77

United States
Member #121,737
January 16, 2012
9,266 Posts
Offline

Jan 11, 2023, 9:29 am

Quote: Originally posted by zephbe on Jan 11, 2023
Give me an example of a person who won a jackpot and went broke from taxes on the winnings. What it sounds like you are saying is the taxes on a jackpot are more than the amount won--and that is not true.

I agree. LF does not seem to understand taxation. The lottery withholds less than the full amount of taxes due so you will owe the rest of the taxes. If you invest any if the winnings, whether it is cd interest, savings accounts, etc., you will owe taxes on the earnings. You are not being taxed twice.

Many lottery winners go broke from stupidity, greed, and thinking they will be a superstar or they start a business where they have zero expertise.

Do not raise your daughter to look for a knight. Raise her to use the sword herself.
CDanaT

Central TN
United States
Member #121,185
January 4, 2012
8,019 Posts
Offline

Jan 11, 2023, 12:06 pm

Quote: Originally posted by Lotto fanatic on Jan 11, 2023
Now, I remember thinking that the biggest reason for Lottery Winners going broke soon was because of giving money to a bunch of people who ask them for money, such as Friends and Family, but it actually turns out that the biggest reason for Lottery Winners going broke soon is actually tax problems. I remember thinking you only get taxed once and then never again, but you actually get taxed twice. A lot of Lottery Winners assume that they only get taxed once and are stunned when they get taxed again. So, taxes are actually the biggest reason Lottery Winners go broke soon. :/

LF...... For the PB and the MM

Lottery winnings of $600.01 and over are subject to Federal Withholding tax. For winnings of $600.01, up to and including $5,000, you will be issued a W-2G form to report your winnings on your federal income tax form. For winnings of $5,000.01 and over, your state's Department of Revenue removes the 24% federal withholding before you receive your winnings check (or, if it is an annuity, from each winnings check). You then receive a W-2G form with each check to submit with your 1040 form to show that the 24% federal withholding already has been paid. In addition to federal tax, your state will make additional withholdings for taxes, and most states will deduct other money that you may owe to the state, such as back taxes, child support, loan payments, etc. In addition, like the federal tax withholding, the state tax withholding at the time of prize payout may not be the total state tax owed at the end of the year. You must consult your state division of taxation for more information about the total state tax requirements for lottery winners.

And another site(s) for further explanation:

https://www.federalregister.gov/documents/2017/09/27/2017-20720/withholding-on-payments-of-certain-gambling-winnings

https://www.irs.gov/instructions/iw2g

Si vis pacem, para bellum.
Stack47

Kentucky
United States
Member #32,651
February 14, 2006
10,404 Posts
Offline

Jan 11, 2023, 12:48 pm

Quote: Originally posted by Lotto fanatic on Jan 11, 2023
Now, I remember thinking that the biggest reason for Lottery Winners going broke soon was because of giving money to a bunch of people who ask them for money, such as Friends and Family, but it actually turns out that the biggest reason for Lottery Winners going broke soon is actually tax problems. I remember thinking you only get taxed once and then never again, but you actually get taxed twice. A lot of Lottery Winners assume that they only get taxed once and are stunned when they get taxed again. So, taxes are actually the biggest reason Lottery Winners go broke soon. :/

There seems to be a misconception about "going broke". Don't know what the average number of tickets each player buys, but I doubt most people go broke buying tickets for one drawing.

Single filer prize winners with a total income of up to $170,050 are in the 24% tax bracket so they shouldn't owe very much if anything because of the withholdings. If the total income is $539,901 or more, they could another 13% in taxes. There probably are people that spend the majority of their prizes only to find out withholding 24% didn't cover all the taxes.

I'm pretty sure someone at lottery headquarters explains possible taxes to large prize winners, but if they don't, google "tax preparers".

"Some people have something to say while other people feel the need to say something"
Ranett

United States
Member #201,950
November 3, 2019
2,973 Posts
Offline

Jan 11, 2023, 2:26 pm

They blow it...........for numerous different reasons.
PrisonerSix

Baton Rouge, LA
United States
Member #4,602
May 7, 2004
1,237 Posts
Offline

Jan 11, 2023, 3:13 pm

I think some of it is giving money away to people thinking they are friends then when the money is gone, the friends are gone. Some people the winner helps will keep coming back for more money again and again.

Some winners also buy big ticket items like mansions, supercars, etc. that have high upkeep/maintenance costs, that also eat away the money.

A lottery win can act as a magnifier for a person, increasing the good and bad in their lives, but it can be used to conquer those bad things if they really want to and are willing to do what they need to do.

Prisoner Six

"I am not a number, I am a free man!"
GiveFive

Florida - West Coast
United States
Member #92,603
June 10, 2010
6,762 Posts
Offline

Jan 11, 2023, 3:57 pm

Would it surprise anyone reading this thread that a wealthy Grandpa's money usually never makes to his grandchildren? It doesn't make much difference as to how Grandpa made his fortune, statistics have shown that more often than not, Grandpa's children will burn through the money they inherited from their father and have little to no money to pass on to their own kids when they die.

The same thing happens with people that are fortunate enough to receive a windfall of cash. Odds are that lottery winners with no experience managing a big pile of money will end up blowing it if they try to manage it on their own. Great wealth has to be professionally managed but many lay people with no experience managing money make the mistake of thinking they can do it. G5

Play Smart!
Artist77

United States
Member #121,737
January 16, 2012
9,266 Posts
Offline

Jan 11, 2023, 5:43 pm

Quote: Originally posted by GiveFive on Jan 11, 2023
Would it surprise anyone reading this thread that a wealthy Grandpa's money usually never makes to his grandchildren? It doesn't make much difference as to how Grandpa made his fortune, statistics have shown that more often than not, Grandpa's children will burn through the money they inherited from their father and have little to no money to pass on to their own kids when they die.

The same thing happens with people that are fortunate enough to receive a windfall of cash. Odds are that lottery winners with no experience managing a big pile of money will end up blowing it if they try to manage it on their own. Great wealth has to be professionally managed but many lay people with no experience managing money make the mistake of thinking they can do it. G5

The book-The Millionaire Next Door- says the same thing. Generational wealth lasts 2-3 generations at best and when it gets to a generation that has never worked for anything , the $ goes quickly.

Do not raise your daughter to look for a knight. Raise her to use the sword herself.
Lotto fanatic

United States
Member #221,636
March 29, 2022
104 Posts
Offline

Jan 11, 2023, 7:25 pm

Quote: Originally posted by PrisonerSix on Jan 11, 2023
I think some of it is giving money away to people thinking they are friends then when the money is gone, the friends are gone. Some people the winner helps will keep coming back for more money again and again.

Some winners also buy big ticket items like mansions, supercars, etc. that have high upkeep/maintenance costs, that also eat away the money.

A lottery win can act as a magnifier for a person, increasing the good and bad in their lives, but it can be used to conquer those bad things if they really want to and are willing to do what they need to do.

That happened to Callie Rogers, Britain's youngest Lottery Winner at 16. She had lots of "Friends," when she had her roughly $2 Million, and they dumped her as soon as most of the money was gone. She said she felt she was supposed to live her life up with the $2 Million and that's why she blew that roughly $2 Million. Interesting that she said something like,"I'm not going to be one of those Idiots who blow through their huge Lottery wins I'm going to be wise with the money, and ended up blowing the roughly $2 Million anyways. She also said she shouldn't have had access to roughly $2 Million at only 16 as she was still legally a child. She said that money should have went into a Trust Fund until she was an Adult in her 20's who would better understand the value of money rather than some 16 year old Teenager. She said something like,"Minors shouldn't be able to win the Lottery I the first place. Minimum Lottery age should be 18, not 16. " She rallied to raise the Britain Lottery Minimum from 16 to 18.
wander73

Search conductor everymailbox

Philadelphia, PA
United States
Member #153,765
March 24, 2014
9,325 Posts
Offline

Jan 11, 2023, 7:44 pm

Quote: Originally posted by Lotto fanatic on Jan 11, 2023
Now, I remember thinking that the biggest reason for Lottery Winners going broke soon was because of giving money to a bunch of people who ask them for money, such as Friends and Family, but it actually turns out that the biggest reason for Lottery Winners going broke soon is actually tax problems. I remember thinking you only get taxed once and then never again, but you actually get taxed twice. A lot of Lottery Winners assume that they only get taxed once and are stunned when they get taxed again. So, taxes are actually the biggest reason Lottery Winners go broke soon. :/

Someone aren't really lottery winners, their part of it

Seeking content generation for various needs including blogs, reselling, and beyond.

Search
cottoneyedjoe

United States
Member #197,023
March 28, 2019
1,697 Posts
Offline

Jan 11, 2023, 10:56 pm

Quote: Originally posted by Lotto fanatic on Jan 11, 2023
Now, I remember thinking that the biggest reason for Lottery Winners going broke soon was because of giving money to a bunch of people who ask them for money, such as Friends and Family, but it actually turns out that the biggest reason for Lottery Winners going broke soon is actually tax problems. I remember thinking you only get taxed once and then never again, but you actually get taxed twice. A lot of Lottery Winners assume that they only get taxed once and are stunned when they get taxed again. So, taxes are actually the biggest reason Lottery Winners go broke soon. :/

I saw a video on YT that said most lottery winners go broke from investing in an Axl Rose themed burger joint called Buns n Roses.
Stat$talker

700 light yrs West of Milky Way Galaxy's Center
United States
Member #200,635
September 1, 2019
4,427 Posts
Offline

Jan 11, 2023, 11:52 pm

Quote: Originally posted by cottoneyedjoe on Jan 11, 2023
I saw a video on YT that said most lottery winners go broke from investing in an Axl Rose themed burger joint called Buns n Roses.

"most lottery winners go broke from investing in an Axl Rose themed burger joint called Buns n Roses."

Yeea joe..that Burger joint wuz right next door to dat Chocolate-covered Crickets store...started by..Ole AllenButthead...
urrutiap

South Dakota
United States
Member #24,148
October 19, 2005
46 Posts
Offline

Jan 12, 2023, 4:30 am

Lotto Fanatic happen to watch that recent Dr Phil episode about the Lottery Curse?
jjtheprince14

United States
Member #180,542
March 12, 2017
294 Posts
Offline

Jan 12, 2023, 8:59 am

Even if you were to win the 1.35 bil MM jackpot. It's best to just be frugal and maybe live an upper middle class lifestyle at best. If you buy 4 mansions, 20 cars, a private jet, a yacht, etc. you're gonna go broke quick no matter how much you win.

I am the Prince of Thieves!!!

New Topic New Poll

Subscribe to this topic

Biggest reason for Lottery Winners going broke soon? :/Prev TopicNext Topic

Biggest reason for Lottery Winners going broke soon? :/Prev Topic Next Topic