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Apr 12, 2024 · Like your paycheck, the government considers lottery winnings income. How much tax you’ll owe will depend on your existing income and, by extension, your federal tax bracket.
Learn how lottery winnings are taxed under federal and state laws, and how they affect your tax bracket and Social Security benefits. Use a tax calculator to estimate your federal and state taxes, and compare the benefits of taking a lump sum or an annuity. Find out how to file your taxes with confidence and get your max tax refund.
Mar 6, 2024 · If your gross prize for lump sum payout is $1,000,000, you need to pay $334,072 in total tax ($240,000 federal withholding, plus the remaining $94,072 for single filing status in 2021). In addition, you need to pay state tax as well, depending on where you bought the lottery and where you live.
Dec 12, 2023 · Say you’re a single filer making $45,000 a year during the 2023 tax year and you won $100,000 in the lottery. That raises your total ordinary taxable income to $145,000, with $25,000 withheld from your winnings for federal taxes.
Lottery winnings are treated as income in the United States, so your final tax bill depends on how much money you make in total in a year, not just the amount you win in the lottery. The following table shows the federal tax obligations for a Powerball winner filing as a single taxpayer.
State WithholdingJurisdictionThreshold For State TaxNo state tax on lottery prizesCalifornia, Florida, New Hampshire, ...N/A2.9%North Dakota$5,0003.07%Pennsylvania$5,0003.23%Indiana$1,200So many losers. But, if on the off chance you do win millions in a lottery jackpot, keep in mind that the Internal Revenue Service will be looking for its fair share. While you don't have to report lottery winnings of $600 or less, if you win more than $5,000, the government will hit you with a 24 percent federal withholding tax.
Apr 7, 2024 · (That's an estimated payout of $621.0 million.) For comparison, a recent $1.76 billion Powerball jackpot had an estimated cash payout of about $774.1 million. Powerball taxes: Lump sum payout or...
