How do winning lottery tickets affect tax deductions?

In addition to the excitement of winning a lottery ticket, there are also tax deductions to consider.

You should know how much you might owe before winning the lottery.

How do winning lottery tickets affect tax deductions?

Many people dream of winning the lottery, but they forget about the taxes and paperwork that come along with it.

According to SmartAsset, the IRS takes 25 percent of your lottery prize.

Your state and local taxes can add an additional 13 percent to the 25 percent when you file your taxes in April.

You should hire a financial advisor to guide you through the tax process, as the maximum federal tax is 37 percent.

Tax deductions are largely dependent on where you live and how much you earn after the IRS takes 25 percent.

If you are single and earn 90K per year, you will owe 24 percent in federal taxes.

It bumps up your salary to 190K if you win a 100K lottery.

You do not pay 24 percent in taxes on 190K, but rather on the extra income that exceeds your original tax bracket.

Taxes vary by state, and some even tax non-residents, so it's best to check with your local jurisdiction.

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