There are two options for the winner. Full payout over a period of time, or a reduced amount of cash immediately. How doe the tax requirement apply ?
There are two options for the winner. Full payout over a period of time, or a reduced amount of cash immediately. How doe the tax requirement apply ?
GETFISHED !!!
Whatever you receive in a given year, that is what your taxed on.
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All I know is that it's a problem I would like to have!
We are living through “A dollar today is always worth more than a dollar tomorrow”. Uncle Sam wins every time!
I can tell you from personal experience, that,if you don't protect that money you will definitely lose it to taxes, State and Federal, and if you live in city, or school district, they too will get their grubby mitts on it too! You have more than two ways to accept that money. The best option is to create a trust. This will keep your money out of the public eye. Especially if you owe any money for any reason, those owed money will be paid before you can get that money,and the process of others collecting their money will go through the courts and you will be responsible for legal fees and much more. Child support alone is going to be an ongoing issue as each year your financial obligations will change. And you can forget about a challenge with the Federal Court, because that's who enforces child support nationwide.
My brother's friend won a million dollars when the draw lottery first started in Ohio. He quit his job at the Hoover Company. In just over one year he was begging for his job back! And very good friend of mine had won ten million and we had talked about this many times, before he hit it big. I had told him that if I were to win that I would create a trust. Only because I have a very successful cousin who is a contract attorney and he had told me about some people make stupid mistakes with a windfall of money. My friend owned money to four credit cards and an old court order for three k. He did create a trust with a state recommended firm.
He did very well and retired eighteen months later.
For me he hasn't changed much, still the same friend to me, and every year on my wife's birthday and mine he gives us each 1k in cash. And we go fishing when ever he wants, and I've been retired for about nine years. And we still fish in his ratty old aluminum boat!!
Taxes would be paid just like normal income. 37% to the federal government and then whatever your state and local municipality taxes are.
At my age, not interested in annual payments.! Give me da MONEY.!!
24% up front and the rest due at tax time, you have an opportunity to reduce tax liability before the final payment comes due. Make those charitable donations! Depending on when you win you better make those quarterly tax payments or be prepared to get hit with additional penalties on that final bill.Originally Posted by Duece22
If I won any decent amount of money I would be hiring an attorney that deals with this type of thing. Seems like a good situation to pay someone to help make sure you don’t make big mistakes. Well worth the cost.
Cash payout is minus taxes I believe
37% of the amount over $693,750 plus $186,601 for those filing jointly.
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43% is close to what all taxes would be on lump sum, after lottery commision reduction for lump sum payment. I guess the lump sum option is lower from the lottery commision due to the fact that they will not be able to use that money to invest and collect interest on the money while only paying out yearly annuity payments.
Not only that you are not promised tomorrow and who says the laws will not change or corruption happens and your money disappears somehow if you do the annual payments?
Cash payout is the current value of the annuity, how much it is worth at the time of the drawing.
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