20 dollars is worth 1 million.
That’s what bare tender Bartender Hubert Tang fond out after he bought two $10 scratch-off tickets with $20 he found lying on the streets outside San Francisco Airport.
One of the tickets that Tang had bought hit the jackpot lottery and he became a millionaire overnight. The store from where he had purchased the tickets also benefited $5000 dollars as bonus as Tang’s luck seemed to have rubbed on to the store as well.
The California Lottery announced this in a statement recently.
And if Tang is lucky the second time, the second ticket can also win up to $25,000, the statement said.
Tang however would not e able to take home the entire $1 million as he has to pay taxes on the winning amount. He would have to shell out a total of 52.9% in taxes payable to the federal and the California government. Of this the Federal tax share is 39.6% while 13.3% of the amount has to be paid to the California state exchequer.
Though the tax bill for lottery is quite high in the US, it should be remembered therefore that one should only count the amount of lottery won after calculating the taxes payable. Even then, people like Tang who end up winning huge amounts assume they will still end up with a lot.
The other downside of the winning a lottery as big as Tang is that sometimes, some winners end up with friends, family or co-workers claiming a share of the loot. Apart from taking an ugly turn defending a law suit claim for the ticket, it would also dent the pocket even before one could get hands on the money from the lottery if the inevitable lawyer fees for defending against the claims are taken into account.
Tang says that he may soon begin leaving $20 bills on the street in random places to spread his good fortune. However for Tang, the giving away of money from the lottery won would also raise tax issues especially if he gives away large amounts.
In the US only up to 50% of your “contribution base”—generally your adjusted gross income can be deducted for charitable contributions. That means that even if Tang gives away the entire amount he won in charity, he would still be able to deduct only half of the total amount.
For gifts to certain private non-operating foundations, veterans’ organizations, fraternal societies and nonprofit cemeteries, the limit is even lower at 30%. One has just five years to use the winning money up even as the winner can carry over excess deductions from one year to the next. One would still have to pay taxes on t he amount that is left or has not been used up.
So wining a million dollar lottery is not all that fun after all – or is it?
(Source:www.forbes.com)
That’s what bare tender Bartender Hubert Tang fond out after he bought two $10 scratch-off tickets with $20 he found lying on the streets outside San Francisco Airport.
One of the tickets that Tang had bought hit the jackpot lottery and he became a millionaire overnight. The store from where he had purchased the tickets also benefited $5000 dollars as bonus as Tang’s luck seemed to have rubbed on to the store as well.
The California Lottery announced this in a statement recently.
And if Tang is lucky the second time, the second ticket can also win up to $25,000, the statement said.
Tang however would not e able to take home the entire $1 million as he has to pay taxes on the winning amount. He would have to shell out a total of 52.9% in taxes payable to the federal and the California government. Of this the Federal tax share is 39.6% while 13.3% of the amount has to be paid to the California state exchequer.
Though the tax bill for lottery is quite high in the US, it should be remembered therefore that one should only count the amount of lottery won after calculating the taxes payable. Even then, people like Tang who end up winning huge amounts assume they will still end up with a lot.
The other downside of the winning a lottery as big as Tang is that sometimes, some winners end up with friends, family or co-workers claiming a share of the loot. Apart from taking an ugly turn defending a law suit claim for the ticket, it would also dent the pocket even before one could get hands on the money from the lottery if the inevitable lawyer fees for defending against the claims are taken into account.
Tang says that he may soon begin leaving $20 bills on the street in random places to spread his good fortune. However for Tang, the giving away of money from the lottery won would also raise tax issues especially if he gives away large amounts.
In the US only up to 50% of your “contribution base”—generally your adjusted gross income can be deducted for charitable contributions. That means that even if Tang gives away the entire amount he won in charity, he would still be able to deduct only half of the total amount.
For gifts to certain private non-operating foundations, veterans’ organizations, fraternal societies and nonprofit cemeteries, the limit is even lower at 30%. One has just five years to use the winning money up even as the winner can carry over excess deductions from one year to the next. One would still have to pay taxes on t he amount that is left or has not been used up.
So wining a million dollar lottery is not all that fun after all – or is it?
(Source:www.forbes.com)