The Mass Lottery Let Down... (home, luxury, income)

[Cape Cod Todd]

My wife bumped into someone she hadn't seen in a bit and it turns out he scratched a big winner on a lottery ticket for a cool One Million! WOW an instant Millionaire right! Quit the job and start living the life of luxury... NOPE.


He took the lump sum and after taxes and fees and service charges he was left with $400,000. They took more than half! Still not bad right but hold on the Gov. came calling again when Tax time came around and he had to pay an additional $50,000 in taxes.


Still $350,000 is pretty sweet and you can do a lot with that, house, new car, vacations etc... but of course he will pay more taxes on all that stuff.

So Scratch a ticket and hit BIG for a Million Dollars, and to bring you back to reality you get slapped in the face not once but twice.

Something is wrong there.

[Dm84]

He took the lump sum - that's half the money right there.

[timberline742]

Nothing wrong there. That's how it works. You get an annuity, or a lump some for a fraction. Makes perfect sense.

[Beaconowner]

In New Jersey they don't tax lottery winnings so you just have to pay federal tax.

[Dm84]

Originally Posted by Beaconowner

In New Jersey they don't tax lottery winnings so you just have to pay federal tax.

Except that's not true.

New Jersey has the highest state tax on lottery winnings in the country.

[Beaconowner]

My mistake. The New Jersey tax law changed in 2009. There is no tax now on winning up to $10,000 After that there is a 3% tax.

[GeoffD]

Originally Posted by Cape Cod Todd

So Scratch a ticket and hit BIG for a Million Dollars, and to bring you back to reality you get slapped in the face not once but twice.

Something is wrong there.

So now you know how a 1%-er feels about the taxes they pay every year on their million bucks of income. 39.6% Federal income tax bracket. 5.15% Massachusetts state income tax. 2.9% Medicare tax. If you earn a million bucks, the government takes just about half of it.

[Dm84]

Originally Posted by GeoffD

So now you know how a 1%-er feels about the taxes they pay every year on their million bucks of income. 39.6% Federal income tax bracket. 5.15% Massachusetts state income tax. 2.9% Medicare tax. If you earn a million bucks, the government takes just about half of it.

Right, and I'm sure everyone should feel sorry for someone who has $500k/year of take home pay.

[timberline742]

Originally Posted by GeoffD

So now you know how a 1%-er feels about the taxes they pay every year on their million bucks of income. 39.6% Federal income tax bracket. 5.15% Massachusetts state income tax. 2.9% Medicare tax. If you earn a million bucks, the government takes just about half of it.

Poor babies.

The tax rate is waaaay too flat. We should be returning to a progressive system akin to our most prosperous decades.

[jellybean23]

I know a one million dollar ticket winner too. They are very pleased with their 350k!