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Started By
Message
re: Mega-million winner still has not come forward
Posted on 12/20/18 at 4:33 pm to Mingo Was His NameO
Posted on 12/20/18 at 4:33 pm to Mingo Was His NameO
The winner has constructive receipt of the entire jackpot regardless of when he signs the ticket and turns it in. Assuming the lump sum is chosen, of course.
Also extensions are for delayed filing, not paying.
Also extensions are for delayed filing, not paying.
This post was edited on 12/20/18 at 4:38 pm
0
Posted on 12/20/18 at 4:36 pm to White Roach
quote:
If you receive a substantial bonus check at work before 12/31, you'll be responsible for the income tax liability by 4/15 of the following year, assuming you don't file for an extension. That's ~3-1/2 months later. If you receive the bonus after 12/31, in the new tax year, you aren't responsible for paying until 4/15 of the next year - approximately 15-1/2 months later. Presumably, that money is invested and earning interest during that extra time period. That's how.
You'll owe an underpayment penalty, but it can be avoided with minimal effort. You'll still have the federal mandatory withholding of 24-25% (I forget).
It's not as cut and dry as you made it out to be, but it's possible nonetheless.
This post was edited on 12/20/18 at 4:51 pm
Posted on 12/20/18 at 4:37 pm to TigerCoon
quote:
Not sure, but the math is pretty easy. Using 5% interest rate on a cash value of 900 million, they'd be losing about 125 grand a day pretax in interest for every day they delay. Pretty staggering.
Oh my what an idiot.
The guy that is now worth over half a billion dollars is missing out on 125k a day.
How is he going to provide for his family with only $500,000,000 instead of $500,125,000?
Posted on 12/20/18 at 7:16 pm to Mingo Was His NameO
quote:
you are mistaken on is how extensions work
I'm familiar with how income tax extensions work. I didn't go into greater detail because it wasn't particularly relevent to the main point of the post. However, I assume your snarky remark was made with regard to the requirenent that estimated tax liability must be paid when the extension is filed. But, Mr CPA, this payment is an estimate and not the final tax liability.
Posted on 12/20/18 at 7:16 pm to athenslife101
Hes dead.
Posted on 12/20/18 at 7:23 pm to slackster
I was using the year end bonus check as an analogy in an attempt to simplify the comment. My original question was regarding whether or not holding off on claiming a gigantic lottery prize until after the first of the year could provide a substantial tax advantage that would offset any interest income forsaken by delaying your prize claim.
Posted on 12/20/18 at 7:24 pm to Higgysmalls
quote:
You could build a lot of schools with that money
You think lottery money goes to schools?
Posted on 12/20/18 at 7:28 pm to White Roach
quote:
My original question was regarding whether or not holding off on claiming a gigantic lottery prize until after the first of the year could provide a substantial tax advantage that would offset any interest income forsaken by delaying your prize claim.
It'd be a simple days interest given up against days gained before tax liability owed, no? I didn't think about it really, but it seems that it's a simple as that at first glance.
Posted on 12/20/18 at 7:34 pm to Mingo Was His NameO
If they don't withhold any taxes from the prize check, but I'm pretty sure they do.
Posted on 12/20/18 at 8:50 pm to White Roach
quote:
If they don't withhold any taxes from the prize check, but I'm pretty sure they do.
I believe it's 24% now.
Assuming tax free interest, the same annualized rate in 2018 that you'll earn in 2019, and one full quarter to earn interest if you claimed immediately, any positive interest rate would make claiming in 2018 better than waiting until January 1.
If you only have two months to earn interest instead of a full quarter, any annualized rate of 2.36% or less would make waiting until January 1 the better option.
Posted on 12/20/18 at 9:36 pm to slackster
I read an article a couple of months back when both when both multistate lotteries we're over $500 million regarding state taxess on lottery prizes. Most state have a special category. For instance, LA takes a straight 5% cut of the prize. One of the more interesting, and surprising, facts I found was that CA charges no tax on lottery prizes. I'd have thought they'd be all over that.
Posted on 12/20/18 at 10:35 pm to athenslife101
I still hope whoever won was already rich just to see the meltdown that would follow.
Posted on 12/20/18 at 10:38 pm to Masterag
quote:
Me to
Your welcome!
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