If you're an Oklahoma resident who's struggling to pay your tax bill on a middle-class income, you may be amused by a recent story on Forbes.com, in which writer Janet Novack calculates the tax bill that would be owed by the winner of the $320 million PowerBall lottery.
First, Novack says, there's the issue of whether the lucky ticket-holder takes his winnings as a lump sum of $213.3 million, or opts to get the full $320 million in 30 yearly payments. In the former case, in most states, the winner would have to shell out 35 percent of that $213.3 million to the IRS. If the winner were unfortunate enough to live in New York City, he'd also have to pay the top New York tax rate of 12.7 percent (which includes an 8.8 percent state tax and a 3.9 percent city tax), for a whopping bite of 43 percent.
In an addendum to her article, Novack reveals that the winner of the $320 million PowerBall jackpot lives in Michigan, which has a flat state tax of 4.35 percent (though there's an additional Detroit tax of 2.5 percent, if the lucky person happens to live in that city).
Novack doesn't explore the tax consequences of the 30-year installment plan, perhaps because that involves complicated estate planning that demands the services of an expert tax attorney. Are you an Oklahoma resident (and not necessarily a lottery winner) who has questions about your IRS tax debt? Call the Oklahoma tax attorneys at Travis W. Watkins, PC (800-721-7054) for a free consultation today!