Q&A: If a person wins the lottery, how much in taxes does the IRS take?

lottery new york

Question by cocovan: If a person wins the lottery, how much in taxes does the IRS take?
Say one million dollars, just for a nice round number, won in New York State.

Best answer:

Answer by Jordyn
All of it

What do you think? Answer below!

There Are 5 Responses So Far. »

  1. Just like income.
    You will have to pay some local and state taxes and federal taxes.
    The money will throw you in the highest tax bracket.
    So expect to pay almost half in taxes by the time it’s all said and done..

  2. 25% Federal Tax.
    8.97% NY State Tax.
    3.648% Additional if you are an NY Resident.
    1% Additional if you are a resident of certain cities.

    Roughly 38% in New York.

    So, of a $1,000,000 prize, you get $620,000.00

  3. The problem is, you won’t know the amount, with absolute certainty, until you file your return.

    The lottery officials are required to withhold money towards that final tax bill, but the number is just a guestimate. Like money withheld from a paycheck, a bonus or cashing out an IRA, it’s either too much or too little. Too much gets refunded. Too little means you still owe.

  4. probably $350,000

  5. The IRS will take a 25% withholdings from the winnings. However, the total tax bill will be 36% on the federal level. If you are using the IRS Publication 17 tables, it will give you a quick and dirty estimate. I am giving this number based on the prize amount without adjusted gross income, deductions and exemptions.

    Also, you need to check the state local income tax rates too.

    DTG

    Amended You also need to check the NYS tax rates.