Description

Ever thought about hitting the jackpot with the Powerball or Mega Millions? Well, let me tell you, the thrill of dreaming big comes with some hidden costs – and I’m not just talking about the price of your ticket! In our latest chat, we dive into the not-so-glamorous world of taxes on lottery winnings. Imagine winning millions, only to find out Uncle Sam has a special interest in your good fortune. We break down how much of your potential windfall gets gobbled up by federal taxes – think around 37%, depending on your income bracket. But wait, there’s more! If you’re living in states like New York or New Jersey, you can expect even more deductions, up to an additional 11% or so. It turns out, those dreams of living large can get squashed pretty quickly once the taxman comes knocking. So, what’s the takeaway? If you’re lucky enough to win, make sure you know what you’re really walking away with. And hey, those of you in no-tax states like Florida, you might just want to stock up on tickets!

Takeaways:

• Winning the lottery sounds great, but remember Uncle Sam wants his share first!
• If you live in a high-tax state, your lottery winnings might shrink faster than you think!
• States like Florida and Texas allow you to keep more of your lottery winnings—lucky ducks!
• The government takes a hefty paycheck from lottery winners, so keep that in mind when playing.
• Tax time can turn that jackpot into a trickle; be prepared for those surprise deductions!
• New York and New Jersey aren't playing around; they take a big bite out of your winnings!

Links referenced in this episode:

• jamesabrown.net