You and your spouse were faithful followers of the lottery. You sat money aside for it every week, and every ticket you bought had those special numbers -- your birthdays and anniversary date. Every week you watched the TV drawing to see and hear the winning numbers, and they always belonged to someone else -- until that magic night when those numbers matched your ticket. Now that you've calmed down, it's time to deal with a fiscal reality. Your national and local governments will come calling for a share of your fortune. It helps to know what you'll have to give them before you go on that shopping spree.
How Much in Taxes Are Taken Out of Texas Lottery Winnings?
Texas residents can't wrangle their way out of a 25 percent lottery tax slapped on all winnings over $5,000. That's not a state law, but an Internal Revenue Service mandate that applies to every lottery winner in the country. That much gets removed from the prize and sent to the IRS before the winner ever gets to reap the rewards of his good fortune. As of 2012, prizes under $5,000 were not subject to immediate taxation. However, the IRS considers it taxable income and expects you'll report it on your annual income tax return.
Does the Arkansas Lottery Automatically Take Out Taxes on All Winnings?
Winners in Razorback country never see 33 percent of their lottery prizes. Arkansas keeps 7 percent on top of the 25 percent the feds take. It could be even more since the state will conduct a little review of your debts. If you owe back taxes, child support payments or other state-mandated or court-ordered debt, Arkansas will pocket the back payments from your lottery check. Arkansas has a state income tax system, so lottery winnings of any size have to be on your tax return.
How Much Taxes Are Withheld on a Large Win With the Georgia Lottery?
Georgia withholds the state income tax rate of 6 percent from all lottery winnings, and all you Georgia Peaches need to claim your winnings during the next dreaded tax season. Lucky lottery winners of $2,500 and above can kiss a portion of their winnings goodbye if they owe back payments of child support. It gets worse for winners who owe outstanding student loan payments or state taxes -- Georgia grabs that money out of prizes worth $5,000 or more.
Percentage of Tax on Lottery Winnings in New Hampshire
Residents of New Hampshire are lucky in that the Granite State doesn't add a state tax to lottery winnings. The state will notify the IRS of any winnings $600 or above, and send you a W2-G Form to include with your federal income tax return.
Can You Declare Non-Winning Lottery Tickets on Your Taxes in Florida?
Florida doesn't have state income taxes, so, nope, there's nothing to declare. You can, however, deduct non-winning lottery tickets from your federal income tax return under certain circumstances. For example, if you spent $1,000 on lottery tickets last year and you won $3,500, you can subtract $1,000 from $3,500 to get $2,500 in gambling winnings. That will reduce your taxable earnings by $1,000.
- Internal Revenue Service: Gambling Winnings Are Always Taxable Income
- Internal Revenue Service: Topic 419 - Gambling Income and Losses
- Internal Revenue Service: Publication 525 (2011), Taxable and Nontaxable Income
- Texas Lottery: How Much of a Prize is Taken Out for Taxes?
- USA Mega: Are Lottery Prizes Taxable?
- Georgia Lottery: Are State and Federal Taxes Withheld on Georgia Lottery Prizes?
- NH Lottery: If I Win, What Taxes Will Be Withheld From My Check Before I Receive it?
- Brand X Pictures/Brand X Pictures/Getty Images
- What Can You Do to Get Out of Major Debt?
- How to Live Wealthy When You're Poor
- How to Handle a Car Repo
- What Is the Grace Period to Get Out of a Home Contract?
- How to Get Out of Debt on a Shoestring Budget
- What Is a NINA Mortgage?
- Can the IRS Take My House for Past Due Taxes?
- Revocable Trust vs. Prenuptial
- Do Both Husband & Wife Have to Sign the House Rental Lease?
- How to Legally Protect Yourself From Your Spouse's Debt