Paying taxes on your lottery winnings

Reply #11

Todd — Tue, 15 Apr 2003 15:20:21 GMT

Megamillionaire, although you have correctly stated the top-tier percentage rate, only someone blindly filing their taxes using the simple form with TurboTax would actually pay that much. With the millions comes the ability to hire a good tax attorney, so I don't think I'd end up paying as much your example.

Reply #10

megamillionaire — Tue, 15 Apr 2003 15:02:31 GMT

The 2002 maximum Federal tax is 38.6% on all amounts above $307,051. NY State tax is 6.5%. N.Y. City also has a tax I'm not sure what the % is.

Reply #9

askjeeves — Tue, 15 Apr 2003 13:39:59 GMT

Being a CPA and once working for what used to be known as a Big 6 accounting firm, I fully back Todd's comment. I also back RJoh's comment above. Lottery losses are only deductible up to the lottery winnings. Though lottery winnings are fully taxed, they are NOT taxed as earned income so therefore, SS taxes are NOT paid.Some states like NJ do NOT tax on lottery winnings.Hope all of you filed your taxes today

Reply #8

CASH Only — Tue, 15 Apr 2003 09:55:09 GMT

Hope everybody wins enough to increase their tax liability next year (of course I prefer none of the winnings paid through annuities).

Reply #7

Todd — Sun, 06 Apr 2003 14:34:28 GMT

Rjoh,The deductable gambling formula applies for any type of gambling, not just lotteries. It's a good idea to keep records of ALL gambling activities together, in case one of them happens to hit a good size prize during the year. For example, if you spend $2,000 on lotteries during the year, and you hit a $5,000 prize on a slot machine, you can deduct your $2,000 lottery expenses from the $5,000, and only pay taxes on $3,000 of the prize.

Reply #6

hypersoniq — Sun, 06 Apr 2003 13:35:47 GMT

$10,000,000 $201,333 $3,020,000$11,000,000$221,467$3,322,000$12,000,000$241,600$3,624,000$13,000,000$261,733$3,926,000$14,000,000$281,867$4,228,000$15,000,000$302,000$4,530,000$16,000,000$322,133$4,832,000$17,000,000$342,267$5,134,000$18,000,000

Reply #5

smd173 — Sun, 06 Apr 2003 10:56:43 GMT

Why does anyone even worry about taxes when it comes to the lottery? Chances are if you win $1500 it is not going to push you into another tax bracket. And even if it did and you had to pay more taxes you still have more money than you originally did.And if you manage to win PB or MM, you'll have so much that taxes will seem like a moot point (especially if you take the lump sum and only have to pay taxes on it once).

Reply #4

Thomas Covenant — Sun, 06 Apr 2003 06:32:52 GMT

Answer to question # 1. Yes, the USA taxes all income from it's citzens, it doesn't matter where the income is from.Answer to question # 2.Even if you give up your USA citizenship, the USA can and will tax you on all USA based income for up to ten years.Answer to question # 3. The standard 38 percent. Plus whatever state and local taxes.

Reply #3

visiondude — Sun, 06 Apr 2003 05:18:58 GMT

cash (or anyone else), dumb question #1if a citizen of the united states crosses the border and buys a lottery ticket in canada and WINS, does the person who won still have to pay taxes on their win here in the U.S.?dumb question #2what if the same person won and then moved to canada immediately, would they STILL have to pay taxes here in this country?dumb question #3if they have to pay taxes, approx how much?VDQPLS

Reply #2

RJOh — Sat, 05 Apr 2003 23:02:25 GMT

It just that I confused lottery winnings with lottery profits. The aveage lottery player can not make a profit from playing the lottery unless he wins more than he spent on all his lottery tickets otherwise he is just adding to his taxable income if he wins anything. As a professional I will only pay taxes on my profits(lottery winnings minus cost of all lottery tickets) as reported on schedule C.RJOh

Reply #1

CASH Only — Sat, 05 Apr 2003 20:32:57 GMT

RJ: If only this were Canada-all prizes TAX-FREE, and LUMP SUM (although there are now win for life scratch games, where the interest on the payments after the initial cheque are taxable).

Paying taxes on your lottery winnings

RJOh — Sat, 05 Apr 2003 20:24:06 GMT

While filling out my federal taxes, I was suprised to learn that the expense of buying lottery tickets greater the amount you win can't be deducted from your taxable winnings unless you are a professional gambler, otherwise you may only itemizes losses up to the amout you win. If you get a form W-2G, you have to file those winnings as income. So if during the year you buy $3000 worth of lottery tickets and win $1500, you can only deduct $1500 as a loss and if your total itemized deductions is... [ More ]