2023-07-05 19:02:24
For the second time this year, the jackpot of Powerball has passed the $500 million mark, having raised the jackpot to $546 million for Wednesday’s drawing.
The winning numbers in Monday’s draw were: 15, 26, 31, 38 and 62, in addition to the red ball 3.
If you’re lucky enough to win, the amount you actually take home is likely to be much less. It depends on two factors: the type of payment you choose and the state in which you live.
For payment, you have two options: a lump sum paid immediately or an annuity spread over 30 years. In the case of the current prize of $522 million, the one-time cash payment would be $269.6 million.
The jackpot rose following no tickets matched all six numbers drawn Saturday night: 4, 17, 35, 49, 61 and 8 in the Powerball.
But while no ticket had all 6 numbers, 28 tickets matched four of the five white balls and the red Powerball. Of those, 22 won prizes of $50,000 and the six tickets (sold in Colorado, Florida, Kansas, Virginia and two in Texas) increased the prize from $50,000 to $100,000 by including the Power Play option.
The odds of winning the jackpot are 1 in 292,201,338.
WHICH IS BETTER? THE CASH PAYMENT OR THE ANNUITY?
With the annuity option, you will receive the full jackpot amount.
With the lump sum payment, you will receive 52% of the jackpot amount, as calculated by lottery site usamega.com.
Many winners choose the lump sum option since the money can be reinvested immediately, although it is generally less money.
Who to tell? How to charge? When to claim your prize? We answer these questions.
Beyond that, you also have to pay taxes. While state taxes vary, all winners pay 24% federal withholding tax in advance on winnings.
However, you will likely owe another 13%, as 37% is the highest tax bracket for single taxpayers making more than $578,125 in 2023.
STATES WITH HIGHEST TAXES ON LOTTERY PRIZES
There are only eight states that do not charge state taxes on lottery winnings, which means they offer the highest payout:
California
Florida
New Hampshire
Dakota del Sur
Tennessee
Texas
Washington
Wyoming
Residents of these states will take home the most following taxes.
For the annuity option, it is $231,691,350, and for the lump sum, it is $119,107,045. In other states and districts, winners are subject to additional state taxes ranging from 2.9% to 10.9%.
STATES WITH LOWEST TAXES ON LOTTERY PRIZES
Below are the five places with the highest possible tax rates on lottery winnings, according to usamega.com:
New York: 10.9% New Jersey: 10.75% Washington, DC: 10.75% Oregon: 9.9% Minnesota: 9.85%
A lottery winner in New York would pay more taxes. For a $366 million jackpot, that works out to $191,797,350 for an annuity payment and $98,506,045 for a lump sum payment.
That’s tens of millions of dollars less than winners in tax-free lottery states would receive.
Depending on where you live in New York State, you may owe even more. If you live in New York City, you will pay an additional 3.876% tax withholding. If you live in Yonkers, you will pay an additional 1.477% tax withholding.
Part of is article was originally published in English by Mike Winters for our sister network CNBC.com. For more from CNBC enter here.
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