When you win a big American lottery jackpot, it's both good news and bad news. The good news is that you are rich and have tons of money. The bad news is that you will have to pay tax - Lots of tax. At least you will be much better off than you were. Using a lottery after taxes calculator will tell you how much you get to keep and how much the IRS will get.
How do you calculate how much taxes you will have to pay on your lottery winnings? First, you should start off with federal taxes. The lottery corporation usually holds back somewhere around 30% for federal taxes. However, the final tax rate may be more than that, so you might end up paying even more when you complete your tax forms at the end of the year. Following federal taxes, you will also have to pay state taxes. Every state is different and some, if you are lucky enough to live in one of those states, do not even tax lotto winnings. But usually, state taxes are about 10%.
So, the sum of all your taxes would probably be around 40%, but could go as high as 50%. But there is even more bad news. You do not qualify for any capital gains breaks on lotto winnings, nor can you do any income averaging to help lower your tax bill.
So then, how much money do you get to keep when you win the lottery in the United States? Expect to keep anywhere between 50% to 60%, in general.
Of course, even with the tax headaches, winning the lottery would be a dream come true, so keep going for it and buy your tickets. Do not let the thought of paying taxes keep you from dreaming about a big win because paying taxes is a problem you should love to have, in this case at least.
Let me finish with some good news for non-American lotto players. If you are Canadian and live in Canada, you do not even need to worry about finding a lottery after taxes calculator. That's because Canadian lotto winnings are completely tax free. However, if you are an American citizen and somehow find yourself visiting Canada, playing the country's lottery games, and winning a big jackpot, you are still required to report your winnings for US tax purposes. Maybe you should just become Canadian; it's just easier over there.