{"id":2032,"date":"2019-08-23T11:35:42","date_gmt":"2019-08-23T18:35:42","guid":{"rendered":"https:\/\/blog-turbotax-intuit-com-develop.go-vip.co\/es\/?p=2032"},"modified":"2019-08-23T11:35:42","modified_gmt":"2019-08-23T18:35:42","slug":"how-will-you-be-taxed-if-you-win-the-powerball-jackpot","status":"publish","type":"post","link":"https:\/\/blog-turbotax-intuit-com-develop.go-vip.co\/es\/uncategorized\/how-will-you-be-taxed-if-you-win-the-powerball-jackpot-2032\/","title":{"rendered":"How Will You Be Taxed If You Win the Powerball Jackpot?"},"content":{"rendered":"

Have you caught Powerball fever? Much of the country has, creating long lines at convenience stores and driving today\u2019s jackpot to a record-breaking $1.5 billion<\/em> dollars as of publishing. Admittedly, your chances of correctly choosing all six numbers are slim \u2013 one in 292 million \u2013 but today\u2019s big drawing is a prime opportunity to think about the tax implications of winning money, big or small.<\/p>\n

Your Lucky Day<\/strong><\/p>\n

All lottery winnings are subject to Federal and (sometimes) state income taxes, and sizeable jackpots are taxed at the maximum federal rate of 39.6%. That means if you were to take your winnings all at once instead of over 30 years, an $930 million cash payout like today\u2019s will equal roughly $368 million owed in Federal taxes.<\/p>\n

Income tax will automatically be withheld from any lottery prize, but only at a 25 \u2013 28% rate \u2013 so winners need to put aside an additional lump sum to pay their Federal tax bill, which will be based on their actual tax rate. Believe it or not, many lottery winners don\u2019t do this and have to pay the consequences of a much higher tax bill later on.<\/p>\n

If the Powerball winner lives in a state with a personal income tax, he or she will also owe taxes to the state. In most states, the tax rates on high-income individuals range from 5% to 10% \u2013 so that means between $47 million and $93 million additionally should be held for state taxes for this particular jackpot. Some cities have local income taxes to consider, as well.<\/p>\n

The Facts About Gambling Winnings<\/strong><\/p>\n

The odds are you won\u2019t need to worry about paying taxes on more than a billion dollars. (If only!) But, the odds are good that you\u2019ll someday win a smaller jackpot, a sports bet or a stack of cash at the blackjack table.\u00a0Casinos and other gaming organizations will send you a Form W-2G if you:<\/p>\n