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Are Lottery Wins Taxable?

Posted On: February 5, 2014

Deciding to play the lottery is not one of the hardest choices of your life. Let’s face it; playing the lottery is probably one of the easiest ways of getting close to a fortune worth tens of thousands or even millions of dollars. Buying a ticket doesn’t cost a small fortune to begin with; the games are played regularly, usually on a weekly basis. You don’t need to know any special rules or have any skills or experience. Marking a ticket with your lucky numbers only takes a few seconds and your work is done. All you need to do now is old on to your ticket and make sure you look the week’s draw results to see how if you have guessed sufficient numbers to be considered a winner. The big jackpot prize is obviously your main aim, but you probably wouldn’t mind settling down with the secondary prize also worth a truckload of money. Speaking of, have you ever thought what would you do with all the money if you would win one day? And do you think you would have to worry about any taxes for it?  

All Gambling Wins Are Taxable

Lottery wins are fully taxable and they need to be reported on tax returns. There are cases when, depending on the type and sum of the winnings, a payer could provide the winner with a Form W-2G, in which case federal income taxes might also be withheld from the payment. Playing the lotterymaster.com lotto games online and wining a big jackpot there will fall under the same tax regulations. But it shouldn’t ruin the fun of marking your numbers manually or using the Lucky Dip instead; the site hosts the biggest lotteries in the world with mesmerizing jackpots and it’s definitely worth paying a virtual visit. As for the case when you do happen to win the big MegaMillions, US PowerBall, or NewYork Lottery jackpots, you will need to report the full amount on the ISR from 1040 on the 21st line. Gambling losses can also be deducted –in case they are smaller than the winnings – using line 28 on the 1040 For, Schedule A.

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