Dumb Questions Thread

[TheCracker]

It always bugged me how they say you are getting x amount of money if you win the lottery. I really wish they truly advertised how much you would actually get after taxes, since you are not getting as much as is listed.

There's a difference between UK lottery winning and US lottery winnings. We don't get taxed on lottery or any gambling winnings, but if any of that money is gifted to friends and family (but not charities) then they are eligible to pay taxes on it - which was Liquid's question in the first place.

In the US you do pay tax on lottery winnings, but i'm unsure of at what point or at what rate that happens. Or even if its the same from state to state.

 

[Joey D]

There's a difference between UK lottery winning and US lottery winnings. We don't get taxed on lottery or any gambling winnings, but if any of that money is gifted to friends and family (but not charities) then they are eligible to pay taxes on it - which was Liquid's question in the first place.

In the US you do pay tax on lottery winnings, but i'm unsure of at what point or at what rate that happens. Or even if its the same from state to state.

Both state and federal take taxes right upfront and then you might have to pay more when you file your taxes depending on how much you won. A decent ballpark is that you lose about 40% of what you win to taxes. The state tax rate will vary state to state though. You also loose a big chunk of your opt to take the payout at once instead of over 20 years.

 

[Blitz24]

There's a difference between UK lottery winning and US lottery winnings. We don't get taxed on lottery or any gambling winnings, but if any of that money is gifted to friends and family (but not charities) then they are eligible to pay taxes on it - which was Liquid's question in the first place.

In the US you do pay tax on lottery winnings, but i'm unsure of at what point or at what rate that happens. Or even if its the same from state to state.

It differs depending on state. Still, each state shows an advertisement so they can put in minimal effort to explain it.

 

[Pupik]

In the US you do pay tax on lottery winnings, but i'm unsure of at what point or at what rate that happens. Or even if its the same from state to state.

Typically, any winnings $600 and over is taxable. Then I recall it's 25% of that, plus whatever new tax bracket you're vaulted into (if any change).

My mother actually hit 5 out of 6 numbers a few years back; basically the tax was automatically-deducted out, leaving her enough to make some house payments and cover the bills for a few months. The pre-tax winnings were less than half the price of the cheapest new car a decade ago.

So if you win $20 at the horse track or $50 from a lottery ticket, you don't have to report it on your taxes, unless all of one's yearly cumulative winnings exceed $600. So if you somehow go on nominal monthly winning streaks at casinos, you're supposed to report that as well.