IRS 1040 forms - http://apps.irs.gov/app/vita/content/globalmedia/which_form_to_file_4012.pdf
Lottery Payment of prizes
Winnings (in the U.S.) are not necessarily paid out in a lump sum, contrary to the expectation of many lottery participants. In certain countries, mainly the U.S., the winner gets to choose between an annuity payment and a one-time payment. The one-time payment (cash or lump sum) is a "smaller" amount than the advertised (annuity) jackpot, even before applying any withholdings to which the prize is subject to. While withholdings vary by jurisdiction and how winnings are invested, it is suggested that a winner who chooses lump sum expects to pocket 1/3 of the advertised jackpot at the end of the tax year. Therefore, a winner of a $100,000,000 jackpot who chooses cash can expect $33,333,333 net after filing income tax document(s) for the year in which the jackpot was won.
Yeah. But still I don't think anyone would complain about taxes if they won that jackpot. I would personally take the lump sum. Did you happen to win a jackpot? Or know of someone that did? It would immensely help my family out.
ReplyDeleteYea, i wouldnt, but it clears up the fact the money just doesnt disappear, but it's withheld. Also, you can get some of the taxes back.
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