Welcome • User Guide
ToS • Privacy • Canary
Donate • Bugs • License

©2024 Poal.co

614

https://archive.ph/ZFkGL

The winner can pick a cash lump sum or payments over time.

The lump sum is only about half the alluring top line prize. If the winner picks the lump sum, that $2.04 billion drops to $997.6 million. Of course that is before taxes. To get the full $2.04 billion instead, the winner would have to pick the 30 annual payments. That works out to about $68 million a year, again, before taxes. Most winners seem to take the cash, but whether it is cash or installments, what’s the tax bill?

From the start, the winner losses 24% federal tax withholding that goes off the top to the IRS. On the $2.04 billion win, the cash election is really $997.6 million. Tax withholding of 24% amounts to $239.4 million, leaving $758.2 million. But the IRS isn’t done yet. Although only 24% is withheld and sent directly to the IRS, our lucky winner will owe a lot more in April of 2023. Since federal income tax rates go up to 37%, and the winner is in the top 37% bracket, another 13%—$129.7 million more in taxes—is due on April 15.

https://archive.ph/ZFkGL >The winner can pick a cash lump sum or payments over time. > The lump sum is only about half the alluring top line prize. If the winner picks the lump sum, that $2.04 billion drops to $997.6 million. Of course that is before taxes. To get the full $2.04 billion instead, the winner would have to pick the 30 annual payments. That works out to about $68 million a year, again, before taxes. Most winners seem to take the cash, but whether it is cash or installments, what’s the tax bill? > From the start, the winner losses 24% federal tax withholding that goes off the top to the IRS. On the $2.04 billion win, the cash election is really $997.6 million. Tax withholding of 24% amounts to $239.4 million, leaving $758.2 million. But the IRS isn’t done yet. Although only 24% is withheld and sent directly to the IRS, our lucky winner will owe a lot more in April of 2023. Since federal income tax rates go up to 37%, and the winner is in the top 37% bracket, another 13%—$129.7 million more in taxes—is due on April 15.
You are currently inside a comment thread.
Click here to see all the comments (8).
[–] • 0 pt

I bet you're one of those blatant motherfuckers who argue that banks should practice usury and charge interest because otherwise they won't survive in this economy.

[–] • 1 pt

The two are entirely different. Should they do it? No. Hitler proved very recently just how detrimental usury is to a society. But they do it, and the government collects taxes; if you’re looking at a real-world example of extremely basic economics, you should take real world factors into account. The government is going to tax lotto winnings. Lotto winners should not be surprised.