The Powerball prize reached $1.08 billion on July 19, 2023.
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It’s authorities: There’s a winner for the $1.08 billion Powerball prize– and the taxman will take a significant cut.
A single ticket offered in California matched all 6 numbers drawn Wednesday night, making it the third-largest reward in the video game’s history, according to the Multi-State LotteryAssociation Last- minute ticket sales pressed the prize to $1.08 billion from $1 billion.
The winner can select in between a 30- year annuitized reward of $1.08 billion or a swelling amount payment of $5581 million. Both alternatives are pretax price quotes.
While both options featured a considerable tax expense, professionals state the winner will require a prepare for handling the windfall.
“The biggest thing is to do nothing,” stated licensed monetary organizer and registered representative John Loyd, owner at The Wealth Planner in Fort Worth,Texas “Let the emotions and overwhelming feelings subside before making any decision.”
California does not tax lottery game jackpots
Before seeing a cent of the prize, the winner will pay a 24% compulsory in advance federal withholding that goes directly to the internal revenue service.
If they select the $5581 million money choice, the 24% withholding immediately minimizes the reward by about $134 million.
However, Loyd cautions the 24% withholding will not cover the whole tax expense since the reward presses the winner into the leading federal earnings tax bracket, which is presently 37%.
California does not tax lottery game jackpots, so there’s no state tax expense if the winner lives there. However, it might be substantial if they purchased the ticket in California however live somewhere else, with some top-income state tax brackets surpassing 10%.
After the 24% federal withholding, the prize winner’s tax expense depends upon a number of elements however might quickly represent millions more.
Powerball isn’t the only possibility to win huge. The prize for Friday night’s Mega Millions drawing now stands at an approximated $720 million. The possibility of hitting the mark because video game is approximately 1 in 302 million.
