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mega millions winner

Topic closed. 13 replies. Last post 13 years ago by Todd.

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August 16, 2003
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Posted: January 1, 2004, 1:43 pm - IP Logged

Hi and Happy New Year to everyone.

The news reports on the winning ticket from Tuesday night's Mega-Million game says that the person will take the cash option which according to CNN is about 91 million before taxes (surprised it was that much...I thought it was closer to half the annuity when you took the cash) and then about 67 million after taxes.

Is that accurate? If the winner takes the cash, at 91 million and the has to pay taxes, wouldn't federal income, social security taxes (both sides...which would make it a self employment tax) and perhaps other taxes (I don't know if Ohio has a state income tax, but I suppose it could be written off anyway) take at least 40% of the gross or more? That would bring it down to closer to 55 or so million.

 

Anyone know about this? Just dreaming.

    Todd's avatar - Cylon 2.gif
    Chief Bottle Washer
    New Jersey
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    Posted: January 1, 2004, 2:02 pm - IP Logged

    This topic (taxes) has been discussed before - try the Search feature.

     

    Check the State Lottery Report Card
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    Sign the Petition for True Lottery Drawings
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      United States
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      Posted: January 2, 2004, 8:22 am - IP Logged

      There is NO Social Security withholding on lottery wins.

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        Posted: January 2, 2004, 9:07 am - IP Logged
        Quote: Originally posted by CASH Only on January 02, 2004



        There is NO Social Security withholding on lottery wins.





        No Withholding. But is there a "self-employment" tax, which is in effect when, you are for example, self employed, no SS tax is withheld from your paycheck, no employer to pay half of the SS tax and you need to file this for yourself. essentially, even though it is not withheld, is there a self employment tax due at any point? 
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          Posted: January 2, 2004, 9:07 am - IP Logged
          Quote: Originally posted by CASH Only on January 02, 2004



          There is NO Social Security withholding on lottery wins.




            RJOh's avatar - chipmunk
            mid-Ohio
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            Posted: January 2, 2004, 2:06 pm - IP Logged
            Quote: Originally posted by joeybabe25 on January 02, 2004




            But is there a "self-employment" tax....... 








            You don't have to be concerned unless you are a winner and self-employed.  If you are the winner then you can afford the services of some one who knows.

            RJOh 

             * you don't need to buy more tickets, just buy a winning ticket * 
               
                         Evil Looking       

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              Posted: January 2, 2004, 11:51 pm - IP Logged

              Gee...thanks for your concern!

               

              How about an answer from someone less concerned with my welfare?

               

              joe


                China
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                December 16, 2003
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                Posted: January 3, 2004, 5:41 am - IP Logged

                I am thinking about when could LP makes a winner?so that we could all benefit~~~just 6 numbers,no big deal

                goose

                  visiondude's avatar - eye3logo
                  light on my feet
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                  Posted: January 3, 2004, 12:38 pm - IP Logged

                   joey,

                   there is a place on the left side of the menu called "big game news".  click on that.

                   scroll down on the left side of the big-game home page until you find "jackpot analysis".    click on that.

                   it will take you to a page that will give you the exact breakdown after taxes for either annuity or lump sum.  scroll down until you find the state that you play in for the after tax payouts.

                   as for personal/business/tax considerations,  no one here can possibly give you that info because we are not privy to your financial personal life.  that would take a consultation with a professional.

                  hope that helps...

                   VISION (youeitherhavevisioninlifeoryoudontandithasnothingtodowithoneseyesight)

                              "i am .........."meant to"       

                  P.S.,  that RJoH  is a stand up guy.  thanks,  vision

                           until further notice,  it's  france everyday

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                    Posted: January 3, 2004, 2:36 pm - IP Logged

                    Hi visiondude,

                    Thanks for the straightforward response. I found it, and it pretty much cleared up my questions.

                    But....I'm still not clear if someone would have to pay SS tax (or self employment tax) on lottery winnings.

                    I have had certain years where my SS tax (I was self employed) was higher than my income tax.

                     

                    Thanks,

                     

                    joe

                      hypersoniq's avatar - 8ball
                      Pennsylvania
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                      Posted: January 3, 2004, 3:39 pm - IP Logged
                      Quote: Originally posted by joeybabe25 on January 03, 2004



                      Hi visiondude,

                      Thanks for the straightforward response. I found it, and it pretty much cleared up my questions.

                      But....I'm still not clear if someone would have to pay SS tax (or self employment tax) on lottery winnings.

                      I have had certain years where my SS tax (I was self employed) was higher than my income tax.

                       

                      Thanks,

                       

                      joe





                      no, you just pay the flat tax... even if you are a professional gambler. The government will take 35% of the jackpot regardless of what you do (if it is in the millions, the magic number is $311,000, anything over that is @ 35%).

                      if you need further information, go here...

                      http://www.irs.gov/instructions/iw2g/ar02.html

                      for help with what you are responsible for as far as self-employment tax, start here...

                      http://www.irs.gov/businesses/small/article/0,,id=98846,00.html

                      Playing more than one ticket per game is betting against yourself.

                        dvdiva's avatar - 8ball

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                        Posted: January 3, 2004, 4:41 pm - IP Logged

                        nope you could deduct any expenses for the year(s) you collect  your prize - if you are paid on an annuity you could deduct trips to vegas or trips to various states to buy lottery tickets and/or gamble. yes it is deductable. but i would hire a pro since they could tell you the best stratagies. dont confuse the current 35% with the atm. and no - there would be no self-employment tax since no business licence is held.

                          hypersoniq's avatar - 8ball
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                          Posted: January 3, 2004, 4:46 pm - IP Logged
                          Quote: Originally posted by dvdiva on January 03, 2004


                          nope you could deduct any expenses for the year(s) you collect  your prize - if you are paid on an annuity you could deduct trips to vegas or trips to various states to buy lottery tickets and/or gamble. yes it is deductable. but i would hire a pro since they could tell you the best stratagies. dont confuse the current 35% with the atm. and no - there would be no self-employment tax since no business licence is held.



                          good points... never thought about the whole business licence issue. Thanks for the info.

                          I think that I will retain my "amateur" status for now, and IF i win, I'll change that to "retired amateur" LOL

                          Playing more than one ticket per game is betting against yourself.

                            Todd's avatar - Cylon 2.gif
                            Chief Bottle Washer
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                            Posted: January 3, 2004, 9:03 pm - IP Logged

                            Don't forget about deducting all the charitable contributions that you're going to make!

                             

                            Check the State Lottery Report Card
                            What grade did your lottery earn?

                             

                            Sign the Petition for True Lottery Drawings
                            Help eliminate computerized drawings!