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How do you choose to have the winning amount in case you hit the jackpot?

Winning a Jackpot

The winner of a $14 million jackpot poses with Rampart Casino General Manager Michael Gaughan Jr. in 2014

This is one of the most important questions that you should ask yourself before you claim the prize in case you hit the jackpot. Here you take the example of playing the Megabucks slot machine at one of the casinos in Las Vegas. You can easily find this slot machine in all of the major casinos throughout the state of Nevada as they all are tied together. The progressive starts at $10 million and any progressive slot machine always play max coin in so Megabucks would be $3 per spin.

So that means Megabucks is a Dollar coin Slot Machine that must have 3 coins ($3.00) played to hit the jackpot. The jackpot is reset to $10,000,000.00 after a jackpot is hit. Not only is this almost certainly the largest jackpot slot in the world, but it was also the first one to link machines from many different casinos in an effort to generate the largest reward possible.

Now imagine you just hit a $33 million jackpot on Megabucks. If you’re lucky, you’ll see half of that after taxes. How you choose to receive your payout helps determine exactly how much you’ll cash in after winning the jackpot. Here are the things you should consider before you ask as how to get yourself paid your winning amount.

1. Note the jackpot taxes

If at the casino you win $1-$1,199 you simply cash out and go. The IRS doesn’t care about jackpots less than $1,200.
But if you win $1,200 – $4,999 you’ve entered the tax threshold. You must fill out a W-2G form to report your winnings to the federals, but casinos aren’t obliged to take out withholdings. It will be up to you to pay the taxes later. However, if a winner fails to provide a Social Security number, the casino will then take out 28 percent for the IRS.
Then again if you win $5,000 or more the IRS will consider your winnings part of your income, which could bump you up to a higher tax bracket. If you hit it really big, expect to pay up to 40 percent in income taxes. For that as an example of $33 million Megabucks jackpot, that would be more than $13 million.

2. The winning payment options you can choose

Most slot companies give winners two ways to receive their money. The choice you make could have important tax implications. One is the lifetime payout and other is in lump sum. See the difference below

Lifetime payout is a set annual payout for a certain number of years. For IGT, maker of Megabucks, it’s 25 years. On a $33 million jackpot, that means an annual payout of about $1.3 million and an annual tax bill of $525,000. That’s just more than $13.1 million in taxes over the span of the payout.

If you choose Lump Sum winners have 60 to 90 days to decide whether you want a lump sum or lifetime payment. If you opt for a lump sum, you’ll have to deal with a hefty interest rate. That’ll leave you with 60 percent of your jackpot. But don’t forget: you still have to pay the government. From the remaining $19 million, the IRS will demand another 40 percent, leaving you with about $12 million.

Finally the choice is yours when you hit a jackpot on any slot machine, as how to take your winnings in check or cash. As said above a check is usually issued for winnings with very large amounts. For multi-million dollar jackpots, a check for the partial amount will be paid to you and you are given some 90 days to decide if you want the remaining balance to be paid in full or in an annual annuity.

Also you have understood that all winnings from any casino are subject to federal taxes. Casinos are not oblige to deduct withholding taxes on jackpots less than $5,000 as long as you can provide your social number. If not, the casino will take 28% withholding tax from your winnings.

Before you are paid your jackpot money, casinos in the United States will require that you present a proper identification because if you cannot, the casino will decline to pay you until a proper identification of yourself will be produced.

Therefore with all these things you need to consider before heading to your favorite slot machine, it is advisable to plan first what you will do if you hit the jackpot. Also don’t forget to bring any valid ID for your proper identification when going to any casino for your own benefit.