A single ticket hit Powerball’s $699.8 million jackpot. Here’s the winner’s tax bill

There is a Powerball winner in California who’s about to be ultra-wealthy — even after giving good ol’ Uncle Sam a reduce of the windfall.

A single ticket offered within the Golden State matched all six numbers drawn Monday night time to land the sport’s $699.8 million jackpot. The highest prize had been rising since early June when a ticket offered in Florida received $286 million.

The newest jackpot ranks because the seventh-largest prize in U.S. lottery historical past and the fifth largest for Powerball.

In fact, the marketed quantity is greater than what the individual will find yourself with. Winners get to decide on between taking their prize as both a lump sum or an annuity paid over 30 years, and both manner taxes eat up a superb portion of the winnings.

For this $699.8 million Powerball prize, the money choice — which most individuals go together with — is $496 million.

Earlier than that reaches the winner, a 24% federal tax withholding of about $119 million will get shaved off the highest. That would go away a hefty $377 million, though the IRS will possible be owed extra at tax time as a result of high marginal earnings tax charge of 37%.

There’s excellent news on the tax entrance: California typically doesn’t tax lottery winnings. That compares with, say, profitable in New York Metropolis, the place a state earnings tax charge of 10.9% would apply, in addition to an area tax of three.876%.

Regardless of the share that goes to taxes, the windfall is greater than most individuals see in a lifetime. This makes it vital to get skilled steering earlier than heading to lottery headquarters, consultants say. In California, you get one yr to assert your prize. Additionally remember that California doesn’t enable winners to stay nameless. 

Typically talking, the primary name must be to an legal professional skilled in helping lottery winners, consultants say. Different professionals additionally must be introduced in to assist, together with a tax advisor and a monetary advisor.

Extra from Private Finance:
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The winner additionally ought to make a duplicate of their ticket and retailer the unique in a protected place (i.e., a lockbox or a financial institution protected deposit field). Moreover, it is best to share the information with as few folks as potential, consultants say.

Powerball’s jackpot has reset to $20 million for Wednesday night time’s drawing. Your likelihood of matching all six numbers with a single ticket is 1 in 292 million.

In the meantime, Mega Tens of millions’ high prize is $45 million for Tuesday night time’s pull. Your likelihood of hitting that recreation’s jackpot is 1 in 302 million.

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