Is it better to win the jackpot with the remainder of 2026 or wait till January 2027Prev Topic Next Topic

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Tone43

Los Angeles California
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June 10, 2022
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Nov 1, 2026, 1:21 pm

This question is more relevant towards paying taxes or when to pay taxes
If a person wins in January, does that mean, they have the whole year to pay due taxes on their winnings
as opposed to winning in November or December of this year
or does the IRS count the days when you owe based on when you claim your ticket
grwurston

100

Root Sums Rule

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April 24, 2010
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Yesterday, 1:46 am

Quote: Originally posted by Tone43 on Nov 1, 2026
This question is more relevant towards paying taxes or when to pay taxes
If a person wins in January, does that mean, they have the whole year to pay due taxes on their winnings
as opposed to winning in November or December of this year
or does the IRS count the days when you owe based on when you claim your ticket

I would assume the taxes would be due the April 15 the year after you claimed the winnings as income.
If you claim your win in 2026 they would be due 4/15/27. If you claim your win in 2027, they would be due 4/15/28.
If you get lucky and hit the jackpot you can ask your tax lawyer, financial adviser, accountant, etc before you decide what to do.
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KY Floyd

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Yesterday, 1:52 am

I'm not sure what that last line means, but in general the IRS only counts days for figuring how much a penalty is or how long you have to do something unusual.
As an individual your tax year is the calendar year. To keep it simple let's say the cash value is an even $100 million and you collect $76 million and have no state tax to worry about. If you invest that by early December at 6% you'll earn $1.14 million before paying the final tax bill on 4/15. That bill will be for the $13 million that wasn't withheld plus a modest amount for investment income at the end of 2026. In the first 3.5 months of 2027 you'll earn about $1.33 million on the whole $76 million and then have about $64.5 million to invest for another 12 months until the next tax bill gets paid. Again at 6% that will earn about $3.9 million, or $2.45 million. On 4/16 2028 you'll have almost $67 million.
OTOH, if you wait and don't get the money until early next year and invest the $76 million in early February you'll have 14 months before losing anything to taxes. 14 months at 6% will earn 7% of the $76 million, or $5.32 million. At tax time you'll lose the same $13 million that wasn't withheld plus almost $2 million of the investment earnings. That leaves $3.32 million plus $64 million, or $67.32 million bucks. As long as I didn't screw up the math you'll be very slightly ahead by waiting, and you'll definitely be less rushed getting things squared away. Again, assuming I didn't make a mistake the early claimant will lose some of the investment to estimated tax payments for 2026, and a late claimant will wait until 2028 to pay the taxes on the investment income from early February through April 2027, slightly increasing the lead they already have. Of course I haven't accounted for any spending, but for the same amount of spending the only change is that the early claimant can spend a bit sooner.
Part of getting your ducks in a row, as grwurston says, will be asking professionals about it. Even if my math is perfect you'd be foolish to simply trust my post in deciding what to do.
CDanaT

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Yesterday, 12:03 pm

It is my understanding that if you win that your estimated owed taxes are paid at the end of the remaining quarters of that calender year.
Jan - Mar, taxes due April 1-15th
April - Jun, taxes due July 1-15th
Jul - Sep, taxes due Oct 1-15th
Oct - Dec, taxes due Jan 1-15th
Using the $100M figure, collecting in Nov/Dec of 2026 and no state income tax, minus the 24% ($24 Million initially taken) the remaining $76M still has an estimated tax due by Jan 1-15th of 2027. I don't think you get to wait until April 15 to send that in but I could be completely wrong on that thought process. Using this site https://www.calculator.net/tax-calculator.html your remaining owed taxes should be in the neighborhood of $12,910,000 if you were say 40 and married.
Collecting in Jan of 2027 gives you the opportunity to pay out the remaining taxes over the entire year.
Should the above tax figure be correct of $24M + remaining $12.91M owed ($36.91M) you would pay equal amounts each quarter. That would be about $9,227,500 per quarter.
Where the $24M is collected immediately when you claim, it would cover that first quarter and the 2nd quarter but you would starting writing a check of approx $3,682,500 to cover the 3rd quarter and the full $9,227,500 on the 4th quarter. That's assuming you have no other deductions.
If my understanding is correct, the other thing, is paying the estimated interest income over the calender year. While I would like to believe Uncle Sam gives its ok to earn all that interest over a year and not sending them a check until April 15th of the following year , it is my understanding that has to be paid quarterly as well, but I could be completely out in left field on that one. Having your approx. $63 Million (take home), drawing 3.5% annual interest, without the IRS holding out their hand each quarter doesn't seem feasible to me but boy do I sure hope I am wrong.
https://www.irs.gov/pub/irs-pdf/f1040es.pdf
All the above is based on my understanding and research. Do not trust me and always consult your tax professional. I have been wrong in the past and know I will be wrong on something in the future.
However, I am looking forward to the day that I do have to deal with this issue. Good luck to all of us with our next lottery purchase.

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us
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October 17, 2026
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Yesterday, 12:15 pm

Quote: Originally posted by CDanaT on Nov 2, 2026
It is my understanding that if you win that your estimated owed taxes are paid at the end of the remaining quarters of that calender year.
Jan - Mar, taxes due April 1-15th
April - Jun, taxes due July 1-15th
Jul - Sep, taxes due Oct 1-15th
Oct - Dec, taxes due Jan 1-15th
Using the $100M figure, collecting in Nov/Dec of 2026 and no state income tax, minus the 24% ($24 Million initially taken) the remaining $76M still has an estimated tax due by Jan 1-15th of 2027. I don't think you get to wait until April 15 to send that in but I could be completely wrong on that thought process. Using this site https://www.calculator.net/tax-calculator.html your remaining owed taxes should be in the neighborhood of $12,910,000 if you were say 40 and married.
Collecting in Jan of 2027 gives you the opportunity to pay out the remaining taxes over the entire year.
Should the above tax figure be correct of $24M + remaining $12.91M owed ($36.91M) you would pay equal amounts each quarter. That would be about $9,227,500 per quarter.
Where the $24M is collected immediately when you claim, it would cover that first quarter and the 2nd quarter but you would starting writing a check of approx $3,682,500 to cover the 3rd quarter and the full $9,227,500 on the 4th quarter. That's assuming you have no other deductions.
If my understanding is correct, the other thing, is paying the estimated interest income over the calender year. While I would like to believe Uncle Sam gives its ok to earn all that interest over a year and not sending them a check until April 15th of the following year , it is my understanding that has to be paid quarterly as well, but I could be completely out in left field on that one. Having your approx. $63 Million (take home), drawing 3.5% annual interest, without the IRS holding out their hand each quarter doesn't seem feasible to me but boy do I sure hope I am wrong.
https://www.irs.gov/pub/irs-pdf/f1040es.pdf
All the above is based on my understanding and research. Do not trust me and always consult your tax professional. I have been wrong in the past and know I will be wrong on something in the future.
However, I am looking forward to the day that I do have to deal with this issue. Good luck to all of us with our next lottery purchase.

Right. If you don't pay estimated tax when due, IRS will charge penalties. AI can explain it.
KY Floyd

NY
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October 16, 2005
5,172 Posts
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Today, 2:45 am

"If you don't pay estimated tax when due, IRS will charge penalties. "
Being self-employed I've never been sure exactly what my annual income will be until the year ends so I've done what my accountant has told me to do, which is make estimated payments that are at least as much as the previous year's tax bill. I've never been hit with penalty, but I've never had my income go up by millions of dollars the next year, either. It seems like a major loophole to have a windfall early in the year and know that at the end of the year your income and tax bill will be substantially higher than the previous year, but I figure my accountant knows the rules.
Either way, my previous post was based on winning and collecting the money late in the year. If maximizing the investment income is the most important thing collecting the money and being able to invest it just a 4 to 6 weeks earlier would mean it's better not to wait. If there's a reason that a bit more time to square everything away is useful the reduction in interest from waiting is fairly small relative to the winnings.
If PB or MM are big enough that I've bought a ticket most of the money will be a charitable deduction, so I'd be expecting a refund rather than owing more than the withholdings. You can maximize charitable donations by making them from untaxed winnings instead of losing money to taxes and then making donations from the smaller after-tax net. That's a main reason that I wouldn't expect to file a claim until well after finding out I'd won.