If a person wins the lottery, how much in taxes does the IRS take?

If a person wins the lottery, how much in taxes does the IRS take?

Postby abel9 » Sun Mar 27, 2011 8:29 am

Say one million dollars, just for a nice round number, won in New York State.
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If a person wins the lottery, how much in taxes does the IRS take?

Postby isiah84 » Sun Mar 27, 2011 8:30 am

All of it
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If a person wins the lottery, how much in taxes does the IRS take?

Postby atuanya6090 » Sun Mar 27, 2011 8:33 am

Just like income.
You will have to pay some local and state taxes and federal taxes.
The money will throw you in the highest tax bracket.
So expect to pay almost half in taxes by the time it's all said and done..
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If a person wins the lottery, how much in taxes does the IRS take?

Postby berton » Sun Mar 27, 2011 8:35 am

25% Federal Tax.
8.97% NY State Tax.
3.648% Additional if you are an NY Resident.
1% Additional if you are a resident of certain cities.

Roughly 38% in New York.

So, of a $1,000,000 prize, you get $620,000.00
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If a person wins the lottery, how much in taxes does the IRS take?

Postby ahanu58 » Sun Mar 27, 2011 8:37 am

The problem is, you won't know the amount, with absolute certainty, until you file your return.

The lottery officials are required to withhold money towards that final tax bill, but the number is just a guestimate. Like money withheld from a paycheck, a bonus or cashing out an IRA, it's either too much or too little. Too much gets refunded. Too little means you still owe.
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If a person wins the lottery, how much in taxes does the IRS take?

Postby mackinley99 » Sun Mar 27, 2011 8:40 am

probably $350,000
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If a person wins the lottery, how much in taxes does the IRS take?

Postby edel » Sun Mar 27, 2011 8:41 am

The IRS will take a 25% withholdings from the winnings. However, the total tax bill will be 36% on the federal level. If you are using the IRS Publication 17 tables, it will give you a quick and dirty estimate. I am giving this number based on the prize amount without adjusted gross income, deductions and exemptions.

Also, you need to check the state local income tax rates too.

DTG

Amended You also need to check the NYS tax rates.
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