An unexpected influx of money, such as from an inheritance, bonus, legal settlement or lottery win, can feel exciting and full of possibility. But without a clear plan, that financial good fortune might not last as long as you hope. For one thing, you may owe taxes, and maybe a lot more than you expect. Some windfalls, such as bonuses, lottery winnings and many legal settlements, are subject to federal income tax. This could be at a rate as high as 37% if your windfall pushes you into the top income tax bracket. State and local taxes may apply, too. Before you start spending or investing, consult us to determine whether you owe tax and, if so, how much.
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