Is There A Strategy For Powerball Winnings, Mega Millions Winnings, Or Any Other Form Of Lottery?
Lots of so-called experts, psychics, etc., promise to give you higher odds of winning the lottery. Unfortunately, most of their advice does not work. If they could change your odds of winning the lotto, they would most likely be looking on this website for advice on how to reclaim their tax on lottery winnings
The most plausible strategy for Powerball winnings
, Mega Millions winnings
, and winnings for other similar lotteries, is to avoid the obvious number choices. Avoid picking a string of numbers like 1, 2, 3, 4, 5 and 6. While these choices have the same statistical chance of winning the lottery jackpot as the usual random number choices, there are many more lottery players who choose these former patterns. Thus any jackpot with these sequences of winning lottery numbers will have to be split amongst many lottery winners
The IRS And Taxable Lotto Winnings
The IRS taxes lottery winners
at its highest marginal rates. If you have won $600.00 USD or more, the IRS taxes lottery winnings
at a rate of 30%. Unlike Canada, whose 6/49 and Lotto Max winners enjoy their lottery winnings tax free
, every significant US lottery jackpot is subject to withholding tax. Luckily, Canadian and overseas lottery winners
can apply to have at least some of their lottery taxes refunded.
Why Do Canadian And Overseas Visitors Buy US Lottery Tickets?
Lots of U.S. visitors purchase lottery tickets in the hopes of getting lucky with Powerball winnings
, Mega Millions winnings
, and winnings of other large US lotteries. Both the Powerball and the Mega Millions lotteries draw from large populations in many states. Since these lotteries draw from a large population, their jackpots can also rise to dizzying heights. In general, states with the Powerball lottery, do not have the Mega Millions lottery, and vice versa. Other multi-state lotteries include 2by2, Hot Lotto, and Wild Card 2.
Scratch and win lottos are another popular genre of lottery. Many of these have sports, humor, or holiday themes, and are inexpensive (just like most lotteries) to play. In addition, the scratch and win jackpot
winner will immediately know if he or she has scratched the winning ticket.
Many visitors to the U.S. purchase lottery tickets because of circumstance, as lotteries are sold pretty much everywhere. Many Canadians who cross the border for less expensive gasoline may splurge on lottery tickets at gas stations. Numerous lotteries are available in almost every state, with the notable exceptions of Alabama, Alaska, Hawaii, Mississippi, Utah, Wyoming, and surprisingly, Nevada.
The prospect of large jackpots entices many Canadians and overseas visitors to indulge in American lotto purchases while in the US.
The IRS And Overseas Lottery Winners
Contrary to what many believe, it is perfectly legal for non-Americans to purchase lottery tickets. If they are truly lucky, they can claim their American lottery jackpots and subsequently also reclaim parts of their tax on lottery winnings
. The relationship between the IRS and overseas lottery winners
is not very different from the relationship between the IRS and domestic lottery winners
, at least when it comes to gambling winnings and the IRS' taxes.
One note of lottery advice: many overseas lottery winners
are unaware of their lottery winnings
. They may have purchased a winning ticket while in the US, but often forget to look up the subsequent lottery jackpot numbers after returning home. After a predetermined period of time passes, they automatically forfeit their lottery winnings
if they do not claim their lottery jackpot.
Lottery Jackpot Winners: Calculating The Tax On Lottery Winnings
Unfortunately, like many other forms of gambling in the United States, there is tax on lottery winnings. A withholding tax of 30% is levied on all lottery jackpots of $600.00 USD and above. Lottery jackpot winners of $599.99 USD or less will receive the entire lottery jackpot amount. A $600.00 USD lottery win automatically will have $180.00 USD ($600.00 USD x 30% withholding tax) deducted from the lottery winnings. Since an overwhelming number of lottery jackpots exceed this threshold, most lotto winners are unable to take home their lottery winnings tax free and have 30% withholding tax withheld by the IRS.
Any lottery winnings from a lottery run by an Indian tribal government in the US is subject to 30% withholding tax on the full amount (without the need to meet a specified threshold) for US non-residents.
If you have been lucky enough to win one of the mega jackpots (such as Powerball winnings or Mega Millions winnings), your gambling losses will not be able to significantly decrease the amount of tax withheld on your lotto jackpot. But, if you are like most lotto winners out there, and have had 30% taken off a $2000.00 USD or $5000.00 USD scratch and win jackpot, your gambling losses will allow you to reclaim all, or at least a significant portion of the jackpot taxes withheld by the IRS. Gambling losses in the US (of any sort) are deductible against your lottery winnings. Even if your gambling losses do not cover the monetary amount of your lottery winnings, you could still be eligible for at least a partial refund.
IRS Taxed Your Lottery Winnings? U.S. Gambling Refund ™ Can Help You!
Dealing with the IRS is notoriously difficult and complicated. Non-US residents attempting to reclaim their tax on lottery winnings
face a few more obstacles that do not exist for US residents. US Gambling Refund ™ is an IRS Certifying Acceptance Agent, and can ensure an efficient and hassle-free tax refund from the US government. We are knowledgeable in both US and Canadian tax laws. We take care of all the minute details, thereby allowing you to concentrate on other things, like enjoying your lottery winnings
. US Gambling Refund ™ serves both Canadian and international gamblers to the US. With our no refund no fee guarantee, you have nothing to lose by letting us help you determine your eligibility for a refund on your taxable lotto winnings
If you are a lottery winner in the U.S. or simply want more information, contact us now to see how we can help you get back your 30% withheld lottery winnings!