Lotto Tax

The question of whether or not lottery prizes are subject to taxation is very common when people think about winning the lottery. We will therefore explain how the lottery ticket buying service works in relation to lotto tax and outline the main responsibilities of you as the lottery player.

The first thing to note is that the lottery ticket buying service automatically deducts any local or federal tax that applies before transferring the balance to your account. The advantage of using local agents to buy tickets on your behalf is that those agents have an intimate knowledge of the rules that apply in their specific jurisdictions and will always operate in a way which fully complies with lotto tax laws. So, for example, if a 10% tax on lotto winnings applies in the game that you have played, 10% of the gross prize would be withheld – either by the service or by the lottery operator itself – to ensure that the lotto tax is paid in full. The remainder would then be transferred to your account.

That takes care of the lotto tax obligations as far as the lottery ticket buying service is concerned, but it is then your responsibility as the recipient of the lottery prize money to abide by any additional lotto tax law in your own country. The best way of finding out whether you need to pay any additional tax to your own government is to make a phone call to your local tax office and enquire directly.

Another way of finding out whether or not you need to report your winnings or pay any additional lotto tax is by talking to a qualified accountant or financial advisor. If you have won a lottery jackpot or a large consolation prize then you may well decide to take financial advice about how to invest your winnings wisely as a matter of course, so in that case asking your advisor about any potential lotto tax liability would also be very easy.

Don't Sweat the Tax!

Regardless of whether or not lotto tax would be payable in your own case, it is important not to allow the subject of taxation to take anything away from your enjoyment of lottery games. The fact is that if you win yourself a sizeable prize – maybe even achieving millionaire or multi-millionaire status – you would still have plenty of cash left over even after paying whatever lotto taxes might become due.

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Tuesday September 26th 2017