Expert Q&A
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Email to a FriendHow much tax is paid on lottery winnings?
I won a modest amout in the lottery recently and we know what we want to use the money for, but what can I expect to pay in terms of taxes on lottery winnings? Does it depend on the state? (I am in CA)
If you won enough in the lottery to have to worry about taxes, you probably had them taken out by the lottery commission before you got the money. If you did, then you will get a 1099 G showing the amount you won and the taxes withheld, much like a W-2 from your job.
If you did not have any taxes taken out, then what I advise my clients (and your situation may or may not fall into this category) is put aside a minimum of 25 percent of all untaxed but taxable income aside to pay for taxes. Depending on your income bracket, that may need to be higher.
