If you win the lottery,do you get back more on your income tax return or less?

Answer 1

Generally, you will owe. The reason is that for special one-time income, such as lottery winnings, casino jackpot winnings, bonuses you receive at work, etc. the payor has to withhold federal income tax at source at the backup withholding rates, which is a flat 26%. However, when you file your tax return, your tax rate will most likely be different. In the case of the lottery, since the income will be substantial, you will be most likely at the highest marginal tax, which is larger than the amount that they withheld.

Answer 2

It depends on how much you win and how much they withhold. If you win the lottery for a huge amount, they withhold a percentage for taxes. If the amount they withhold is more than the taxes you end up owing on it, then you get more back. Most of the time, the amount they withhold won't cover the taxes on a huge win, so you'd owe more or get back less.

Answer 3

In the U.S., you'll owe taxes on your prize. So, if you now earn $30,000 per year and get back $500 on average on your return and you win a $1 million lottery, you'll have to write a HUGE check to the government for taxes. (Probably over $300,000). Actually, you won't even get the full lottery prize. The state will withhold taxes for you and give it straight to the IRS.

Answer 4

you would not recieve more money on your income tax, since you have just recieved depending on whether you take the lump sum or the annual payment an increase in your annual income, which would mean you would actually end up paying more for your income

Answer 5

less because you made more money

Answer 6

not to be sarcastic but would that matter?