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Day: May 11, 2019

How Are Lottery Winnings Taxed in America?

How Are Lottery Winnings Taxed in America?

In the United States of America, you have access to some of the biggest lottery draws in the world. Mega Millions and Powerball pay out lottery jackpots worth hundreds of millions of dollars on a regular basis, but winners of these generous prizes must pay out a significant portion of their prize money in taxes with each state dictating its own requirements on how much money prize winners should part with.

Absolutely every lottery jackpot that is won in America worth over $5000 is subjected to a federal tax of 25%. This money is used to fund a wide range of government programs, including education grants. So, while it may seem unfair that a quarter of your winnings are being given to the government, you can rest assured that they are being used for a good cause.

On top of the federal tax, there is also a state tax. The amount of taxes you pay depends on the state in which you purchased the ticket and your state of residence. These taxes are allocated to government programs on a state level, rather than going to federal programs.

There are some states across America that do not charge taxes on lottery winnings. They are: Washington, Texas, Tenessee, South Dakota, New Hampshire, Pennsylvania, Delaware and California. The states with the lowest taxes (4% and less) are: Colorado, Missouri, Indiana, North Dakota, Oklahoma and Virginia.

Arizona, Illinois, Iowa, Kansas, Maine, Massachusetts and Nebraska charge a 5% tax on all lottery winnings. The states that charge the highest lottery taxes are: Washington, D.C., Oregon, New York, New Jersey and Maryland. Their lottery taxes exceed 8%, with New Jersey charging an enormous 10.8%.

Individual cities also benefit from lottery taxes. Compared to federal and state taxes, these are quite low. These tax rates rarely exceed 3%.

You can choose to accept your lottery winnings in a lump sum or in annuity payments, receiving installments on a yearly basis. Each of these options is taxed at 25%, but you should note that the lump sum total is always smaller than the total of the annuity payments.

So, a $20 million lottery prize will vary greatly depending on where it is won and how you choose to be paid. For example, if you win the lottery in California, your lump sum prize would be worth $11.25 million and your annuity payments would total almost $15 million by the end of 26 years. If you win the lottery in New Jersey, your lump sum would be worth $9.5 million and your annuities would be worth just over $12.8 million.…

How to Change Career

How to Change Career

If you are unhappy at work it may be because your major career decisions were made for the wrong reasons. This is very common, especially when you consider that many of those decisions are made at a very young age, when you had little experience of the world outside school or college. In addition, the careers advice you were given was probably brief and possibly delivered by someone with little training. Added to this, your parents may have encouraged you to get a good job, brushing some of your own ideas as unrealistic. And they probably paid for your education and so after years of training for a specific career, you feel you're stuck with it.

Now you have bills to pay, sometimes even a mortgage to repay, along with a family who rely on you for support. With so much stacked against you, how can you possibly even think about changing careers?

It might be better to ask: "How can you not think about changing careers?" It may seem selfish to put yourself first, but if you are not happy, chances are your family will not be either. So the first step is to admit to yourself that you need a change and the second is to start investigating the possibilities.

Look at the aspects of your current and past jobs that you have enjoyed. If you really do not enjoy anything you are doing now, write down the things you hate most and look at the alternatives. So if you hate being cooped up in an office, where would you rather be – in the countryside, working in a hospital or school, traveling between different cities or countries? If you hate number crunching would you rather be working with children, writing, painting or designing web sites?

Next consider your dreams. What would you secretly like to be doing and what is stopping you from doing it?

Then write down all the skills you would like to use in a job, staring with existing skills and adding new skills you would like to learn.

By now you should have some idea of ​​the types of jobs which would fit in with your preferences. The next step is to research these, to find out which might be suitable. You also need to discover which qualifications are necessary and how you could get them. If you need to retrain, you should look at funding options and also part-time study.

Changing career requires effort, but think about the alternative – another 20 or 30 years of boredom and frustration. The internet has made is much easier to move into a new industry nowdays, offering distance learning courses in many subjects and also providing new opportunities to work at home, either for yourself or for a company.

© Waller Jamison 2007 …