This is a basic overview of the US Lottery and Taxes. There is absolutely no doubt about the fact that lottery taxes would be an uncomfortable face of winning million jackpot or some other costly prizes in the national and stage games. The winners get huge sums of money and even half of money could be taken by taxes. It is therefore important to understand the workings of US lottery and taxes so that you take very wise decisions in this regard. The assessment of US lottery and taxes are normally based on non-cash and cash prizes that are won through the means of legal gaming. These would include the national lottery game like the Powerball and Mega Millions as well as the cash prizes from casinos, contests, sweepstakes, raffles and scratch tickets.
Indeed any person who may be privileged to win a lottery must instantly hire the services of a expert public accountant or a trusted financial planner. It is important that you hire such a person to help you to take certain decisions. A number of people just have no thought as to how to decrease the burden of lottery tax as they acquire this new wealth. They just get involved with this newly found financial status and end up being broke in a very short time.
Indeed lottery winners have to give taxes whenever it is due. A lot would depend on the date and amount of money that is won. The taxes would be taken from the prize when the money is distributed or when winners may be necessary to pay annual or quarterly installments. It is important to note that when the tax installments would not be remitted when due the IRS assess interest, penalties and late fees. When combined these fines could be like thirty percent of all that is owed.
All winners of the lottery are responsible for the payment of federal and state taxes unless their state of residence is not into the collection of income tax. The payers of tax could pay averagely 45 to 50% of the entire prize amount. When it comes to US lottery and taxes the rate of lottery tax is would be based on the market value of the prize and the amount of pretax income of tax payers. When it comes to the winnings of jackpot lotto this puts the tax payers in a tax bracket that is higher and needs the filing of itemized returns as well.