About lottery winnings?

Question

My husband and i live in pennsylvania and won 200,000 thousand dollars on the lottery....I went to pennsylvania lottery website and it says 25% is taken out for federal withholding and it says no state or local tax is charged on pennsylvania lottery winnings to pennsylvania residents...So how much after taxes will we get?

Answer 1

You will get $150,000 I can understand your lack of math ability considering your excitement. Hey email me I could use a couple of bucks! :)

Answer 2

You'll get $150,000.  When you file your tax return at the end of the year, you'll include those winnings, and calculate your actual tax.  Depending on your other income for the year, what they withheld could be too much, or not enough - if your total withholding is more than you owe total, then you'll get the extra refunded - if your tax is more than what was withheld, then you'd have to pay the extra.

Answer 3

You don't know what 25% of 200,000 is?!?!?!

They will take out 50,000 leaving you 150,000.

Answer 4

The lottery will send $50,000 to the IRS and you will receive $150,000.  However, it is likely that the amount of federal tax withheld will not be enough to pay your income taxes.

For example, suppose your other income is $50,000.  You must add the $150,000 to your other income.  Before the lottery winnings, you were in the 15% bracket.  After adding the lottery winnings, you are now in the 28% tax bracket.  If your other income is more than $50,000, your new tax bracket could be as high as 35%.

You need to have your tentative tax figured by a preparer.  If there are additional taxes owed, you should send in a payment using Form 1040-ES.  That will save you penalties and interest.  You don't want to be in the position of owing a lot of taxes after you have spent the money.

Enjoy you lottery win and have your taxes figured so you set aside enough to send in for your taxes.