What is the tax deduction for lottery winnings?

Answer by  turkishtowel (455)

There is no tax deduction for lottery winnings. Lottery winnings are taxed as income and you must pay taxes on any lottery winnings you might receive during the course of a calendar year.

Answer by  Kurt (4579)

Lottery winnings are added to your taxable income. If your payment is high enough, it will put you in a high tax bracket. Look at a tax table or check with a tax professional before deciding how much to have withheld. Make sure you have enough withheld to avoid problems.

Answer by  Chaneygirl (1755)

You can deduct your losses up to your winnings, provided you can itemize deductions. If you cannot itemize, there is no deduction.

Answer by  DiegosMom (66)

Lottery winnings are not a tax deduction. All lottery winnings have to be claimed on your taxes and depending on your state and amount of winnings and amount of other income, the tax could be as much as 50% of the winning. You are able to deduct loses for the year up to the amount of winnings.

Answer by  jessicat1982 (162)

In the UK lottery winnings are non-taxable, which means you do not pay any tax on the money you have. Although in the U.S.A any winnings over $600 are subject to federal tax and dependent on which state it is won in you may also have to pay state tax too.

Answer by  HumptyDumpty (30)

Your lottery winnings are fully taxable. However, if you are lucky enough to win the lottery, you may deduct the cost of tickets you have purchased.

Answer by  tamarawilhite (17883)

This depends on the state where you live. At a minimum, federal income taxes of 25% are with-held. State income taxes will also be with-held, unless you live in a state without an income tax. For a high tax state like California and for a high award, up to 50% will be with-held for taxes.

Answer by  tamarawilhite (17883)

The tax rate on lottery winnings is the rate of individual income taxes. If you are in the 25% federal tax bracket, you will pay 25% income tax on the winnings. You will also owe state income taxes.