Gambling Madness

[eaglesaquarium]

 

 


Even after taxes, you'll still have more money than you could probably ever make in your entire life. lol

 
The danger for folks who win the lottery is that they THINK that they won the entire amount... but that's not true.  And a lot of lottery winners end up worse off than before winning.  
 

 
Sorry, I don't get this, you pay money to win a jackpot, but you don't get the entire amount

 
This must differ from the UK lottery jackpots which is tax free so you DO get the entire jackpot amount, how does this work in the US?
 
But I do agree with the sentiment that a lot of jackpot winneres end up being worse off before they won their respective jackpots. I have heard many crazy stories of folks spending millions on basically nothing and then going back on benefits afterwards

 
This actually about about a month or two ago when a couple won £50,000 and spent the lot on holidays and cars etc but nothing worthwhile and now they have applied for benefits again, this REALLY gets to me how folks can be so stupid.
 


 
All lottery winnings are taxed by the federal gov't.  In addition to that, the lottery winnings aren't a lump sum of the 'jackpot' amount.  The lump sum figure is only about 60% of the annuity (spread out over 30 payments/29 years).  And then the taxes...  With a scenario like the one being discussed the tax bracket is 39.6%.  (28%-31% will be withheld, no matter what).  AND... many states tax the winnings as well.  New Jersey taxes at 10.9% of lottery winnings.  Pennsylvania (where I live) does not.
 
 
 
http/www.fool.com/school/taxes/1998/taxes980710.htm
 
But, if a New Jersey resident won this lottery and took the lump sum, the $1.5Billion would drop to about $600M or less.  IF, the lottery winner doesn't hire a tax lawyer to help them distribute their funds, then they end up 'losing' a whole lot more to the gov't in taxes.
 
 
For example: If they decide to 'gift' $20M to their 5 closest friends... their friends will be taxed at the same rates, and their friends will end up with less than $10M each of that gift.  That's one of the reasons that many lottery winners don't come out right away after they win (if they are smart)... they are hatching their plan with their tax attorney.   If they want to split the winnings like outlined above, they need to claim that their friends were a part of a 'lottery pool' (even after the fact, this can be done) where each of them wins a portion of the jackpot.  As a result, they get hit with the initial tax bill on the 'gross' amount, not the portion gifted after taxes.

 

[Akasha72]

here in the U.K 'winnings' are tax free as far as I'm aware. There are several day time tv programmes always giving away money in competitions and they always say 'tax free'. The lottery is the same - it's tax free... unless you pay the cheque into a bank account that taxes you of course!
 
I've often thought about what I'd do if I won and because I've experienced severe poverty I hope I'd be sensible. I'd house myself, look after those that have looked after me and give some to my favourite charities and then calm down and live the way I live now - carefully

 

[jag51186]

I just want to pay off my student loans, both my wife and I have completed graduate programs, plus our mortgage...so I could stand to win a million lol

 

[Baccus]

Wins in Lotto in Australia are tax free, so you do get the full amount (provided of course you where the only winner and not one of 15 winners in a 30 000 000 jackpot), but after the first day/ week/ month you will be paying taxes on interest earned from the lump sum sitting in your bank account, as well as taxes on any investments you where able to take on after winnning a large amount of money. A lot of people forget about the future taxes that they will accrue with the money sitting in their bank account accumilating interest, so they just keep spending on crazy things trying to live a billionaire lifestyle and get a rude shock at tax time if they have managed to fritter away all the cash and not left anything for the taxes that where owed.