The most loyal taxes on lottery winnings
Which lotteries have the most loyal taxes on lottery winnings
Lottery players know that the chances of winning the jackpot are insignificant, but this doesn’t stop them from purchasing tickets. Those who are optimistic couldn’t care less about issues such as taxation, because they would gladly accept conceding a portion of these potential payouts. Nevertheless, it is worth knowing which lotteries are the most loyal ones in terms of taxes, especially nowadays when it is easier than ever to play in foreign lotteries.
US lotteries is a subject to federal taxes
The Internal Revenue Service makes no exceptions and those who win a sizable amount while playing the lottery, should know that a quarter of their prizes will be withheld as a tax. Any amount that exceeds $5000 is subject to taxation and there is no way around it, but there are additional fees charged by every state. New Hampshire, Tennessee, Washington, South Dakota and Texas are the only exceptions as these states don’t levy additional taxes on lottery winnings. Those who play in local lotteries will only concede a quarter of their jackpots to the IRS, while receiving the rest of the amount.
Indiana, Virginia and Oklahoma are some of the states that impose minimum taxes of only 4%, which is way below the national average. At the opposite end of the spectrum we find states such as New York, Maryland and District of Columbia which charge 8% or more. If you are seeking lotteries that have low taxation levels, you should probably avoid New Jersey ones as the state is at the top of the list with a massive 10.8% tax rate.
European lotteries are generally tax-free
Things are very different on the old continent, where governments are charging the lotteries before they award any prizes. The National Lottery for instance withholds 12% of the money collected from selling tickets, while the operator Camelot keeps an additional 5%. Roughly half of the amount goes towards fueling the jackpot and lower tier prizes, so winners know exactly how much they can win. It is a more straightforward procedure, because players are not deceived by the prospect of huge winnings only to be deprived of more than half of the amount.
The Spanish lottery used to follow a similar pattern, but it recently introduced a 20% tax in the beginning of 2013. This will be applied to all games and players who win €2500 or more will all be subject to this new tax, that is supposed to bring more money in a declining budget. Spanish people are particularly enthusiastic about their lottery and it is very unlikely for this new tax to have a deterring effect on them. Players from all over the world are advised to read the terms of service carefully to know exactly how much money they might have to pay in taxes.
Check out the Practical advices for lottery winners now.
