Question

will irs take lotto winings? Can llc help reduce tax liability on it

Forum|Forum|2 years ago
August 5, 2023
1 reply
0 views

Recently my son won 50k of the billion dollar powerball. He owes about 20k in takes and has been making payments toward it. Will the irs garnish the money owed? Also he will be claiming the funds using his llc he established 4 years ago. Will that bring his tax liability down for the winnings? btw we are in nyc

Not A Product Question

M

Mike9241

I assuming by recently you mean 2023. I'm surprised that no federal taxes were withheld from the winnings because the law requires 24% (or about $12,000) to be withheld for winnings over $5000. NY/NYC also requires taxes to be withheld. OR IS THE SITUATION THAT HE HASN'T YET CASHED THE TICKET? in addition, he may owe IRS penalties if his timely tax payments weren't 100% of 2022 or 110% if his 2022 adjusted gross income was over $150,000. Similarly, there could be state and city penalties. since the winnings apparently are in 2023 any balance due on his taxes needs to be paid by 4/15/2024. A single-member LLC is disregarded so it won't help. and trying to transfer the winnings to a multi-member LLC or S-Corp would likely cause serious tax issues since it seems it wasn't them that purchased the ticket.