How much money does the government take from your winnings if you win the lottery?
Question by beachbum: How much money does the government take from your winnings if you win the lottery?
If an american wins the lottery, how much money does the US Government take from those winnings? If that person wins the lottery in a different country, do the same rules apply as they would if that person won the lottery in the USA?
Best answer:
Answer by ksmpmjoll
generally 50% – and I don’t know of any foreign lottery that allows non-citizens to win
Here in Canada, its all tax free…the government takes Nothing, nada…all mine to keep.
Lottery winnings are “ordinary income.” So you’re taxed at the rate as if you had earned that money in that fiscal year. This may include state or local income taxes (note the state in which you win the lottery may want those income taxes). For big payouts, I think about 40% for all taxes would be about right.
If you win the lottery of another country, the country of your citizenship will want their cut. There may be deductions for out-of-us income, but I believe it will still be taxed.
(P.S. if you got an e-mail saying you’ve won a European lottery, throw it away, it’s a scam!)
(Others talk about “top tax brackets.” at 35%. That’s federal. Don’t forget state and local taxes, too. )
It will vary according to the tax bracket that you are in. You can pretty much estimate it at about a third. It also depends how you win it and where. Some state lotteries do not charge state taxes on state residents who win, others do.
If you are at the highest Federal tax bracket it wll be 35%.
And correct, most places don’t let non-residents participate in lotteries.
if you are in the united states and you are from there they take you 20 percent and if you are from somewhere else 45
It depends on how much you win. If you win in the millions on cash option then you are taxed like a rich person — 40% of the winnings. Doesn’t make any difference which country.
IT WORKS OUT TO ABOUT 48%.
IF YOU WIN A CASH PRIZE FOR 1 MILLION IN THE LOTTERY THE VALUE OF THE TICKET IS ONLY 50%.
THAT LEAVES YOU WITH 500,000 THAT THEN GETS TAXED TO THE TUNE OF 48% WHICH SHOULD LEAVE YOU ABOUT 240,000 FOR YOU. IF YOU DON’T BELIEVE HOW LITTLE IS LEFT AFTER YOU WIN CALL THE LOCAL LOTTO OFFICE IN YOUR STATE THEY WILL VERIFY.
IF YOU TAKE ANNUAL PAYMENTS THE WINNINGS ARE THEN PAID OUT OVER 20 YEARS AND TAXED ACCORDINGLY YOU END UP WITH A LITTLE OVER 50% OF THE PRIZE BUT YOU HAVE TO WAIT 20 YEARS TO RECEIVE IT ALL. SUCKS DOESN’T IT.
EVEN IF YOU LIVE ABROAD YOU WILL BE TAXED.
The top tax bracket in the United States is 35%. The first amount of money is taxed at lower rates. So the 35% does not kick in until you reach $ 366,550 of total income. So the total tax ends up being a bit below 35%.
I forgot state taxes which vary from state to state, but are usually based on some percentage of the federal tax. I live in NH, which does not have an income tax.
It’s taxed as earned income, obviously at the top tax rate. You’d currently lose around 30%.
Americans are taxed on their total income from all sources – so if, as an American, you won the British lottery, you would have to declare that income on your tax forms, and you would be taxed accordingly.
probably around 99%
😉