How Much Federal Taxes Are Held From Lottery Winnings?

by Tara Thomas ; Updated August 02, 2018

In 2016, American lottery hopefuls spent approximately $80 billion dollars on a chance at changing their lives forever. However, few winners are ever prepared for what comes next. If you’re like many lottery winners, you might be wondering about the lottery tax rate and how much tax you'll pay on your winnings. The simplest answer is, it depends. How much you ultimately will owe depends on your filing status and tax bracket, and your taxes on the winnings are due at tax time.

Taxes on Lottery Winnings Depend on Tax Brackets

On the surface, most people are at least somewhat familiar with tax brackets, but there's also a lot of confusion and misconceptions surrounding them. Otherwise known as tax rates, these are the rates at which you’re taxed on any income. For IRS purposes, any lottery or gambling winnings are considered income, and as such, you may find yourself paying a higher tax rate or in a higher bracket. A common misconception is that once you reach a certain income, all of your income is taxed at the same rate. This is not the case. The tax rate is progressive, meaning the more taxable income you have, the higher tax rate you will pay on certain portions of it. This includes all the money you make as a jackpot winner.

Tax Brackets for the 2018 Tax Year

The tax brackets for the 2018 tax year (taxes filed in 2019) have changed from 2017.

10 Percent Tax Rate

  • Single: Up to $9,525
  • Head of Household: $13,600
  • Qualifying Widow/er or Married Filing Jointly: $19,050
  • Married Filing Separately: $9,525

12 Percent Tax Rate

  • Single: $9,526 – $38,700
  • Head of Household: $13,601 – $51,800
  • Qualifying Widow/er or Married Filing Jointly: $19,051 – $77,400
  • Married Filing Separately:

    $9,526 – $38,700

22 Percent Tax Rate

  • Single: $38,701 – $82,500
  • Head of Household: $51,801 – $82,500
  • Qualifying Widow/er or Married Filing Jointly: $77,401 – $165,000
  • Married Filing Separately:

    $38,701 – $82,500

24 Percent Tax Rate

  • Single: $82,501 – $157,500
  • Head of Household: $82,501 – $157,500 
  • Qualifying Widow/er or Married Filing Jointly: $165,001 – $315,000
  • Married Filing Separately: $82,501 – $157,500

32 Percent Tax Rate

  • Single: $157,501 – $200,000
  • Head of Household: $157,501 – $200,000
  • Qualifying Widow/er or Married Filing Jointly: $315,001 – $400,000
  • Married Filing Separately: $157,501 – $200,000

35 Percent Tax Rate

  • Single: $200,001 – $500,000
  • Head of Household: $200,001 – $500,000
  • Qualifying Widow/er or Married Filing Jointly: $400,001 – $600,000
  • Married Filing Separately: $200,001 – $300,000

37 Percent Tax Rate

  • Single: $500,001 or more
  • Head of Household: $500,001 or more
  • Qualifying Widow/er or Married Filing Jointly: $600,001 or more
  • Married Filing Separately: $300,001 or more

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Tax Brackets for the 2017 Tax year

For the 2017 tax year (taxes filed in 2018), there are seven tax brackets or tax rates that determine how your income is taxed. A portion of your income is taxed at each tax rate until it surpasses a certain threshold. When you exceed a particular tax bracket, any subsequent income higher than the previous bracket will be taxed at the higher rate until that threshold is surpassed, and so on until the 39.6 percent rate is reached. This means, all taxpayers with more income than those in the lowest tax bracket, are in fact paying taxes in two or more brackets.

The following list breaks down the 2017 tax rates, or brackets, that determine at which rate a particular portion of your income will be taxed:

10 Percent Tax Rate

  • Single: Up to $9,325
  • Head of Household: $13,350
  • Qualifying Widow/er or Married Filing Jointly: $18,650
  • Married Filing Separately: $9,325

15 Percent Tax Rate

  • Single: $9,326 – $37,950
  • Head of Household: $13,351 – $50,800
  • Qualifying Widow/er or Married Filing Jointly: $18,651 – $75,900
  • Married Filing Separately: $9,326 – $37,950

25 Percent Tax Rate

  • Single: $37,951 – $91,900
  • Head of Household: $50,801 – $131,200
  • Qualifying Widow/er or Married Filing Jointly: $75,901 – $153,100
  • Married Filing Separately: $37,951 – $76,550

28 Percent Tax Rate

  • Single: $91,901 – $191,650
  • Head of Household: $131,201 – $212,500
  • Qualifying Widow/er or Married Filing Jointly: $153,101 – $233,350
  • Married Filing Separately: $76,551 – $116,675

33 Percent Tax Rate

  • Single: $191,651 – $416,700
  • Head of Household: $212,501 – $416,700
  • Qualifying Widow/er or Married Filing Jointly: $233,351 – $416,700
  • Married Filing Separately: $116,676 – $208,350

35 Percent Tax Rate

  • Single: $416,701 – $418,400
  • Head of Household: $416,701 – $444,550
  • Qualifying Widow/er or Married Filing Jointly: $416,701 – $470,700
  • Married Filing Separately: $208,351 – $235,350

39.6 Percent Tax Rate

  • Single: $418,001 or more
  • Head of Household: $444,551 or more
  • Qualifying Widow/er or Married Filing Jointly: $470,701 or more
  • Married Filing Separately: $235,351 or more

Knowing Your Filing Status

Age and marital status are key determining factors in figuring which filing status applies to you. These filing statuses determine your tax rate, filing requirements, and any tax credits or deductions for which you’re eligible as well as standard deductions. Sometimes, you may find yourself eligible to file under two statuses at the same time. In this case, the IRS instructs you to select whichever status affords you the greatest deductions and tax benefits. If you’re unsure which status you fall under, the IRS website has helpful interactive tax assistant tools to help. It is with knowledge of your filing status, and income, that you determine how much of your winnings you can expect to be taxed.

About the Author

Tara Thomas is a Los Angeles-based writer and avid traveler. Her articles appear in various online publications, including Sapling, PocketSense, Zacks, Livestrong, Modern Mom and SF Gate. She began her writing career in college authoring grant proposals for a Southern California marine science laboratory, which helped her develop a lifelong passion for environmentalism. She has a Bachelor of Science in marine biology from California State University, Long Beach. Thomas is also an event consultant/planner, spent 10 years as a mortgage consultant and enjoys writing on the subjects of travel and personal finance.

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