Powerball lottery: Monthly payments or cash?
The Powerball Jackpot Soars to $1 Billion
The Powerball jackpot has skyrocketed to an incredible $1 billion after Monday’s drawing failed to produce a winner. This makes it one of the top 10 biggest jackpots in Powerball history.
What You Need to Know About Payouts
The next drawing will take place on Wednesday night, and if you’re lucky enough to draw the winning numbers, here’s what you need to know about the payouts.
Lump Sum Option
If you choose the lump sum option, you’ll receive a one-time payment of the entire jackpot amount. However, keep in mind that the IRS will take a significant cut, with a mandatory 24% withholding for funds over $5,000. The amount of state taxes deducted will depend on your place of residence.
Currently, with the Powerball jackpot at $1 billion, winners who opt for the lump sum cash option will take home $516.8 million.
It’s important to note that choosing the lump sum option means you’ll receive less cash overall. This is because payments increase over time, and a sudden influx of money could push you into a higher tax bracket.
Annuity Option
If you prefer the annuity option, you’ll receive a one-time payout followed by a series of distributed payouts over a 30-year period. Taxes will be paid as you receive the payments, and the tax rates can fluctuate over the years.
While the tax rates on annuity payments may vary, they won’t be as substantial as the lump sum option, where almost half of your winnings can be lost before reaching your bank account.
Remember, Powerball ticket sales close at 10 p.m. EST on the day of the drawings, which are held on Monday, Wednesday, and Saturday.
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