Get ready to say no a lot, accountant tells Mega Millions mystery winner
The most valuable lottery ticket in New Jersey state history was sold at the Riverdale Lukoil South station. Despite the fact the drawing was last week we still do not know who owns the millions. This video details what we do know. 4/2/18
An attendant speaks to reporters after the New Jersey Lottery announced that Friday’s winning Mega Millions ticket, now worth $533 million, was sold at the Lukoil station on Route 23 south in Riverdale. (Photo: Jai Agnish/NorthJersey.com)
- Lottery jackpots are really taxed at 46% in NJ, not 25%.
- Hire a professional accountant, attorney, and broker.
- Don’t change your lifestyle too much.
- Get ready for people to come a-knocking.
RIVERDALE — Be ready to say no — a lot!
That’s advice from an accountant to the winner of the $533 million New Jersey Mega Millions, whoever that may be.
Daniel Mahler, certified public accountant with Gisler & Mahler in Bloomingdale recommends the winner practice saying no to requests he will most likely get and seek professional financial help as well.
The winning $533 million NJ Mega Millions ticket was sold in Riverdale on March 30 and no winner has stepped forward.
Mahler, who is also mayor of Wanaque, said his law firm represented a $38 million lottery winner in the 1980s.
Station manager Nash Riad, who was contacted by lottery officials Saturday morning, said he is unsure who bought the winning ticket, now worth $533 million. (Photo: Viorel Florescu/Northjersey.com)
The $38 million winner is doing just fine, he said. He moved to Florida. His accountant followed him there and started a new firm.
Not all who win major jackpots fare as well. Mahler said some go broke.
So, here are some tips for the new winner.
Expect to pay a boatload in taxes
Lots of the winnings will go toward income tax. Forget the 25 percent number that’s been floating around out there. Mahler says it’s more like 46 percent when all is said and done.
If the winner opts for the cash value option of $324 million, $149 million goes to taxes, leaving $175 million. The winner also has the option of receiving the $533 million over 30 years and to pay tax on the yearly amount.
Just got off the phone with the wonderful folks at @TheNJLottery. Still no sign of the winner. Winner has 359 days to claim the prize. We’ll let you know when we know. https://t.co/Z8cPcGm5cd via @northjersey
Where did 46 percent come from? Welcome to the millionaire tax bracket. It’s 37 percent now under President Donald Trump — down from 39.6 percent.
In fact, Trump actually saved our local yet-to-be-identified Mega Millions winner $8.4 million, Mahler — a Republican — is quick to point out.
The rest of the 46 percent is made up of 9 percent from New Jersey’s income tax rate. Mahler pointed out that New Jersey Gov. Phil Murphy, a Democrat, is trying to get a new millionaires tax rate passed from 9 percent to 11 percent.
“If he does that it will most likely be retroactive and he’ll get whacked,” Mahler said of New Jersey’s new lottery winner.
It would wipe out a lot of the aforementioned Trump benefit, he said.
The bottom line: In New Jersey lottery winners can expect to give about half of their winnings to pay taxes.
Tax season: Mahler said winners also had better file their taxes on time every year because when you’re talking millions of dollars, the penalty on a late payment will sting.
Side note: Did you know in California lottery winners don’t have to pay state taxes on the jackpot money? Just saying.
Get some pros to help you out
Mahler said lottery winners should take their time coming forward, and they need to line up the professionals.
“Get a good attorney, good accountant, good broker,” he said.
“This guy has to watch himself. Everybody’s going to come after him. Everybody looks for a handout.”
Wanaque Mayor Daniel Mahler, also an accountant, on New Jersey’s Mega Millions winner
He said some people simply can’t handle that type of money.
“These numbers are staggering,” Mahler said.
Mahler said he is personally a big fan of municipal bonds for a steady 3 to 4 percent income stream.
“You have to protect your wealth,” he said.
A 3 or 4 percent return on millions of dollars is a lot of money, he said.
Don’t change your lifestyle
Mahler said the winner probably won’t be shopping at the Riverdale Walmart down the highway ever again, but winners should live the way they lived before the money.
He even suggested lottery winners live at the same means and put the rest of the money away.
“Enjoy life,” he said. “You have to do something with your life.”
But, he said, winners should keep their job or volunteer somewhere.
Get ready to say, ‘no!’
Mahler said lottery winners need to be prepared for when people start asking them for money.
“This guy has to watch himself,” he said of New Jersey’s big winner. “Everybody’s going to come after him. Everybody looks for a handout.”
He recalled when someone knocked on a lottery winner’s front door with a sob story about how a family member had cancer and asked for money.
“People just knocked on his door,” Mahler said. “He had to change his phone number because people kept calling him. Everybody’s going to be after you.”
Ameer Krass, owner of Riverdale Lukoil South, speaks about the winning lottery ticket on Monday, April 2, 2018. The most valuable lottery ticket in New Jersey history was sold at his store. The annuity jackpot for the drawing, which took place Friday, is $533 million. (Photo: Kevin R. Wexler/NorthJersey.com)
Mahler said he has a lot of respect for the owner of the lucky Lukoil in Riverdale, Ameer Krass. The Route 23 south location sold the winning Mega Millions ticket to last week’s mystery winner. Krass claims he knows who the winner is because he says he reviewed surveillance footage and determined that the winner is a frequent customer.
But, Krass said he has not tried to contact the lucky ticket holder, and he urged anyone who might know them to give the winner “the space they deserve.”
Email: [email protected] Follow Jai Agnish on Twitter and Instagram: @jaiagnish
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A local accountant, whose firm represented a $38 million lottery winner offers some advice to NJ's $533 million Mega Millions winner. Say no – a lot!
Taxes On Lottery Winnings by State 2020
There’s no doubt that winning the lottery is exciting and can significantly help the winner financially; however, the winner must not be too quick to spend all of his or her winnings. Like other income in the United States, the IRS taxes lottery winnings.
Lottery winnings are considered ordinary taxable income for both federal and state tax purposes. Winnings are taxed the same as wages or salaries are, and the total amount the winner receives must be reported on their tax return each year. Before the winner receives any of the money, however, the IRS automatically takes 24% of the winnings. The rest of the winnings are expected to be paid by the winner when filing the return.
What is the tax rate for lottery winnings? For federal taxes, lottery winnings are taxed according to the federal tax brackets. Federal tax brackets are progressive, so portions of the winnings are taxed at different rates, and could be as high as 37%. State income taxes vary by location. Some states do not have a state income tax, while others may withhold up to 8.82%.
The states that do not levy an individual income tax are:
Six states do not have a lottery: Alabama, Alaska, Hawaii, Mississippi, Nevada, and Utah. Two states, California and Delaware, do have a lottery but do not tax winnings.
If the winner buys a winning ticket in a state that they do not live in, most states will not withhold the winnings. Out of the 43 states that participate in multistate lotteries, only Arizona and Maryland tax the winnings of people who live out of state.
Here are the 10 states with the highest taxes on lottery winnings:
- New York (8.82%)
- Maryland (8.75%)
- New Jersey (8.00%)
- Oregon (8.00%)
- Wisconsin (7.65%)
- Minnesota (7.25%)
- Arkansas (7.00%)
- South Carolina (7.00%)
- Connecticut (6.99%)
- Idaho (6.92%)
Taxes On Lottery Winnings by State 2020 There’s no doubt that winning the lottery is exciting and can significantly help the winner financially; however, the winner must not be too quick to spend