5 Ways to Save on Your Taxes When Winning the Lottery


The earliest known lotteries offered money prizes as tickets. Low countries towns held public lotteries to raise funds for poor people and town fortifications. These lotteries may be older than we think, since a record dated 9 May 1445 from L’Ecluse mentions raising funds for fortifications and walls, and mentioning a lottery with 4,304 tickets worth florins (US$170,000 in 2014).

Statistical probability of winning

You may think that playing more frequently will increase your chances of winning the lottery, but that’s not true. Statistical probability of winning a lottery is the same whether you play one ticket or multiple tickets. For example, if you buy two tickets, your chance of winning the Mega Millions jackpot will double, but if you buy only one ticket, your chance of winning the Mega Millions is still zero. In order to increase your chances, you need to buy a lot of tickets.

Costs of buying a ticket

According to a recent survey, Americans spend more on everyday purchases than on buying lottery tickets. On average, they spend $109 per month on impulse purchases, according to the Ladder poll of 2,000 U.S. adults. That’s more than enough money to buy a ticket a few times, but how can you know for sure if you’ll win the lottery? Here are some tips to avoid getting sucked into the lottery machine.

Taxes on winnings

There are two primary ways to collect your prize after winning the lottery. You can take your winnings in installments over 30 years, or donate them to your favorite non-profit organization. Depending on your circumstances, you may even qualify to take advantage of certain itemized deductions to reduce your tax burden. However, you must be sure to check with your state’s department of revenue to determine which rules apply to you. Listed below are five ways to save on your taxes when winning the lottery.


Many lottery scams take advantage of the gullibility of the public and the goodwill of people. Many lottery scams target vulnerable populations, such as seniors or people who live alone. Scammers pose as illegal immigrants and say that they have won a lottery. They then ask for money or jewelry to be sent to their prize-claiming agents. While you can report the scam, you should never share your personal information with lottery scammers.

Saving for a big win

As you approach the day of your lottery win, you might be overwhelmed with emotions. If you’re not prepared for sudden wealth, you may spend the money on impulse. There are several ways to save your prize money, but you should err on the side of conservatism. Rather than using your money to buy luxury items, park your winnings in a bank account or US Treasury securities. You could also park your money in the stock market or other high-quality investment platforms.

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