I Have Questions …
About My Lottery Winnings
Can I sell my lottery payments?
Contact your lottery company to determine if your annuity can be sold. If it can be, keep in mind the following considerations:
- Currently, not all states allow aftermarket sales of lottery annuities for a lump-sum payment, so double check with the state you live in and the state the ticket was sold in.
- You negotiate and determine the terms of sale — sell all or part of your future payments.
- Court approval is required for the transaction to take place. A judge makes the final determination for whether or not such future payments can be sold.
Source: Stone, J. (2017, November 21). Are Lottery Annuity Payments Transferable? https://finance.zacks.com/lottery-annuity-payments-transferable-11734.html
Do lottery annuity payouts have better tax benefits?
Lump sum recipients’ winnings are treated the same as any other income, and are therefore subject to income taxes on the total amount at the rate of that particular tax year. This means some lump sum recipients may find themselves in a higher tax bracket. With annuities you are generally taxed on the amount received in any given year. You should speak with a financial advisor or tax professional when decided which option is best for you.
Will I owe taxes if I sell my lottery payments?
When you cash in on some or all future lottery payments, it is considered a taxable event. Taxes are withheld from the amount distributed to you according to applicable tax laws.
What happens to my lottery annuity if I pass away?
Lottery annuities may allow payments to be passed to the winner’s heirs when the annuity owner dies. In that event, your inheritor(s), whether beneficiary individuals or in the form of an estate, will receive any remaining payments.
About My Casino Winnings
How do casinos pay out my winnings?
A particularly successful night in the casino could mean your winnings are subject to different forms of payout per specific casino policies. In some instances, you will have more control over the disbursement method than others.
- Most games allow for a lump sum payment.
- Certain games and large sums of winnings require an annuity.
- It all depends on the casino, the games played, and the amount won.
The best way to be sure about your choices is to check with the casino and verify your options if you have won a large amount of money by playing a particular game.
Are my casino winnings taxed?
Casino winnings are often taxed. Depending on the amount won and the games played, you should be aware of the following regulatory standards:
- Lump sum payouts of $5,000 or more are subject to income tax and may bump winners up to a higher tax bracket. Check with your particular state for regulations regarding gambling taxes.
- The IRS also taxes gambling winnings; a W2-G tax form will need to be filled out come tax season if your winnings exceed these minimum thresholds:
- $600 at a horse track — if you have won 300 times your bet or more.
- $1,200 from a slot machine or game of bingo.
- $1,500 in Keno winnings.
- $5,000 in poker tournament winnings.
The casino typically withholds up to 25% of your winnings if the amount surpasses these thresholds.
You should consult with a professional tax advisor for tax advice and information related to your specific circumstances.