Quote:
Originally Posted by blueoval
What was the tax rate for that 1b powerball anyway? I heard it was 70% over a certain amount in the US. Either way, the government win.
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From
http://www.cnbc.com
That estimated $1.5 billion prize is only if the winner opts to take the winnings in 30 payments over 29 years. If you want the money now in one lump sum, the jackpot is a mere $930 million, a cut of 38 percent.
Next up is the federal tax bill. Lottery winnings are taxed as ordinary income.
"If they win the jackpot, they're going to be subject to the
highest federal tax rate of 39.6 percent," said Melissa Labant, director of tax advocacy for the American Institute of Certified Public Accountants. "It's a lot more significant than folks expect."
Nor are there many workarounds to substantially cut that bill. "You're not the type of consumer the U.S. government is looking to give a tax break to," she said.