My friend won the lottery, now he's screwed.
 

He won $500,000 on a scratch off. They took $180,000 off the top for taxes when he got the money. Since he won, it jumped him into a higher tax bracket, so he had to pay another $43,000 in taxes for the difference. He used almost all the winnings to pay off his house and car, so now he's trying to figure out how to pay the $43k in taxes. Fucked up situation if you ask me.

Maybe he should have saved the 43k?

Time to get a home equity loan :upsidedow

He thought they already took the taxes. He didn't realize he would be taxed again.

If he paid off the house and car, wouldn't that bring him back down to the normal bracket and not have to be taxed $43,000?...

there is only 1 winner ... STATE

i understand that they tax lottery winnings in the US but i don't see how they could also consider it income after that.. that doesn't make any sense...

Money is the root of all evils ...

Simple solution, give the money back.

He did not get taxed again. The amount they withhold at the time they give out the check is an approximation. You never know the actual final number for taxes until you do the paperwork.

Best bet for him (imho) is to do a loan against the house. Yeah, he'll have a house payment again but he will be out of trouble with the taxman.

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$43k home equity loan should be around $300-400 monthly. Most likely much lower than what he was paying before for that and the car.

Paying off the car was an okay idea, paying off the house not so much. He most likely had a great interest rate and a nice tax deduction.

His biggest mistake was not consulting an accountant.

Yeah this is the best advice. Not to mention, $43k isn't much to owe on your home really, could clear that with a $1k a month mortgage payment in less than 5 years. If he can afford more then he could nail it in 3 years very easily.

In the long run he will be well ahead - seems like he had good financial intentions. Mortgage and car payments were probably $3k per month range, once he gets this sorted out he will be well ahead of the game. Sucks for now though as he probably feels a lot poorer.

Exactly correct.

Should have kept his mouth shut and not report it.

if he had spent it on hookers and blow he wouldn't be in this mess.

:thumbsup

The lottery is nothing more than a Tax on the poor :2 cents:

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:thumbsup :thumbsup

so fucking typical of lottery winners.

I mean, I want to feel bad, but who accepts a check for $320,000 and spends every penny before talking to an accountant.

and how is he screwed? he paid off $320,000 in debt, now has to take on $43,000 in debt, looks like a $277,000 win to me.

I have only ever met 2 people who won the lottery. 1 from Ottawa who won $1 M (non taxable) and one from London, ON who won $17 M (again, in Canada , so non taxable). First guy was wealthy before, but still quit his job and was bankrupt in 18 months. Second (couple who won $17M) came from no money, quit their jobs and went bankrupt in 30 months.

2 hours with a competent adviser and this wouldn't happen, that would be about $120, well spent.

Bang on!

This is where all the losing lotto tickets pay off. I know there is a limit on how much you can use to write off but it would take a nice dent in it.

Sounds like he blew the entire 500k the first year... lol

Did he try to re-calculate it with IRS with some accountant?

Buy more scratch offs

must be Obama's fault !

How the fuck you can go bankrupt with 17mil cash? If i would won on lottery,i would simply put money on bank and live on interest.

Do a GoFundMe for him, GFY will chip in as usual :2 cents:

No it isn't. Common misquote...

It is just starting, wait till his wife want the half of the money ...

Read Diogenes Laertius on Diogenes of Sinope and Timothy 6:10.

This is Florida right?
So.....I'd say a typical situation.

When you get a windfall take half and invest it immediately.

THIS! :thumbsup:thumbsup:thumbsup

Us scholars don't misquote, we do hermeneutics.

people are fucking fools when given money. get the equity. could have bought a apartment complex or homes with that cash. :2 cents::2 cents: this is a buying season for property. my daughter got a 3 bedroom 2 baths in gilbert,az $30,000 on a acre and a half land.

Is he a senile old man related to someone on this board

:thumbsup

Winner?????

My friend won $12 million, went bankrupt 6 years later. Now works at 66 years of age instead of retiring and lived on a beach till the end of his days.

Those checks come attached to a stupid gene.

The best way for him is if you lend money to him

He should sell his house and buy precious metals and bury them in the ground. Then wait a few years and negotiate lower amount of back taxes from the IRS. Better yet get Ecuadorian residency and leave this sinking ship.

Wish we could all have those sorts of problems.

jesus that big lotery winners going bankrupt in months, how the fuck they do it

Mo money mo problems

a lady here in my city won 8 mill! she bought a big house and some cars that she paid for in full. that is all she has left of the winnings. :1orglaugh:1orglaugh

People forget they have to self sustain after buying things right? :)

if you go interest only and get an introductory rate you can get that for $100-150/month

He probably still pays a guy $150 to do his taxes.

damn , get a consultant's opinion.

If 43k is extra tax then he makes 400k a year and the extra 43k is hardly screwing him. He will make that back in saved payments in about one year also.