If I win $40,000.00 tax free in a Michigan Lottery on April 15,2013 (income tax deadline) what is the real win?

I make about $40,000 dollars (between Social Security and a Ford Motor Pension) and I wonder if I won $40,000 tax free what the real amount of the winning would be?

makes me wonder

Update:

The deal with the Michigan lottery is the state bills me and the lottery makes up the difference

why would I pay anything if the state pays my tax?

this is kind of confusing

where do you get the 15% tax?

Update 2:

Thanks anyway ROB

do we now ROB Peter to pay Paul?

my name is Paul ~by the way

how do this thing work?

Update 3:

WOW! THREE TOP CONTRIBUTORS

I guess its that I BELIEVE THE state of Michigan

when they say I will win this$40 grand tax free

maybe in the end the Federal Gov't and social security will get their 30 pieces of silver

Update 4:

the state of Michigan has a TAX FREE

The$40,000.00 top prize is NET of STATE and FEDERAL TAXES on the gross

so many people answered that I MUST

pay a tax..this tax information is advertixed for the March 15, 2013 drawing~the day the income taxes are due

FYI

5 Answers

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  • Bobbie
    Lv 7
    7 years ago
    Best Answer

    Not free of federal income tax at all I would guess about 20% in your case during the 2014 tax filing season and if they withhold FIT of 25% as estimated advance taxes for you to be able to use as a tax credit during the 2014 tax filing season for the 2013 tax year then you MIGHT be able to qualify for a REFUND of some of the withheld tax amount providing that you are have some amount of FIT withheld out of your pension and SSB amounts or you may want to calculate and make some estimated tax payments during the 2013 tax year to make sure that you do not owe a whole lot during the 2014 tax filing season. 03/31/2013

  • 7 years ago

    Some states do not charge taxes on winning the lottery in your own state. Federal is still taxing.

  • tro
    Lv 7
    7 years ago

    if you win $40K and your other income is $40K, you will be taxed on the total amount, probably at least 85% of your SS will be taxable

    the lottery may not be taxable to Mich as a state lottery, and with that adjustment you would be taxed on your other income

    some states do not tax SS so it might boil down to your pension for Mich is all you are taxed on

  • 7 years ago

    You're confused

    Lottery winnings are NOT tax free

    State does withholding, but you have to file a tax return to determine tax owed

    Just like regular job, employer does withholding, but you have to dfields tax return

    Source(s): Tax pro
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  • Rob
    Lv 7
    7 years ago

    u still need to pay federal of 15 % at your rate.

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