Don't Mess With Taxes

I admit it. When I make an occasional foray into the coronavirus world, which is a quick trip to my local grocery every 10 days or so to buy milk, I look at the lottery ticket machines.

Did you know that the Mega Millions jackpot is $255 million? Powerball is a relatively paltry $77 million, not that I'd turn it down if my numbers came up.

And yes, I did buy tickets. Why, ask my more frugal and fiscally conservative readers?

Because I'm bored. There's only so much to stream or read or rewatch or reread. The possibility of being a big winner is a nice fantasy break.

Lottery tickets more tempting: I am not alone in my dream of sudden riches.

"People are looking for things to do. People can't gamble on sports, can't watch sports, can't go to casinos, can't go to movies," Jay Finks marketing director for the Oklahoma lottery told Stateline.

In the Sooner State, the scratch-off lottery numbers "are extraordinary," said Finks.

That appears to be the trend nationwide. Americans cooped up due to COVID-19 and watching their bank accounts dwindle are looking for alternative entertainment and hoping for a windfall more than ever.

That's led to skyrocketing state scratch-off lottery ticket sales, according to Stateline, which analyzes and reports on state policy for The Pew Charitable Trusts.

Scratch-off tickets are appealing than my preferred multi-state lottery slips to many because of their more immediate gratification.

Some of my old, losing Powerball tickets. Yes, I've been a sucker for big jackpots years!

Payoffs for states: States, too, are pretty pleased.

Oklahoma's total lottery sales were just more than $7.7 million for the week ending April 25, up about 75 percent compared with the same time last year. Most of that growth, or around $5.9 million, was from scratch-offs.

Here in neighboring Texas, scratch-off ticket sales also have increased.

For the week ending May 2, Lone Star State lottery sales totaled $146 million, the highest-ever sales numbers for the week. Again, that was due mostly to a 24 percent increase over last year in scratch-off sales.

And although lotteries typically provide only a small portion of state budgets (at most around 3 percent, according to Stateline), any increase in income is welcome at time when already struggling states are taking huge hits due to pandemic-prompted shutdowns.

Don't gamble on taxes due: Of course, if you do win either one of the national lottery drawings available in 45 states and the District of Columbia or a scratch-off ticket or two issued by your own locality, remember that your good fortune is even more good luck for tax collectors.

Gambling winnings are taxable at the federal level and in most states.

When I take my Mega Millions lump sum payout, which right now is estimated at just more than $210 million, the cut to the Internal Revenue Service will be included. I don't have to worry about a state income tax here in Texas.

But I will want to follow my earlier blog post's 5 tax tips for the newest Powerball millionaires.

Even if your winning scratch-off amount is less, the tax advice applies to you, too.

Here's hoping that we both soon need to follow it!

You also might find these items of interest:

• Don't get into lottery tax trouble
• Gambling loss deductions still allowed under new tax law
• Reporting gambling winnings & other income on Schedule 1

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