24 percent of your prize money will be withheld from federal taxes.
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On Friday, no player matched all six numbers on the Mega Millions so the jackpot now reaches $ 376 million. In the case of this Saturday’s draw Powerball could reach the $ 342 million.
Due to taxes the amounts of both draws are not what you would get if you were the winner in case of hitting. The odds to win the Mega Millions are 1 in 302 million and 1 in 292 million for the Powerball.
What to do if you win the lottery?
Sweepstakes experts recommend that the first thing to do is “take a deep breath and calm down.” Even if you are eager to claim your prize, you should not rush to the raffle headquarters and claim your prize.
As if it is a sports team, what you should do is gather a group of professionals who can recommend you how to best manage the amounts of money earned. Your team should include a contador, a Financial Advisor and a attorney.
Choose between an annual payment or the lump sum
The winners of the sweepstakes have to face the question if they will receive the prize through an annuity for the next 30 years or receive the full sum in cash.
For the jackpot of Mega Millions of $ 376 million, the option to request the cash is of $ 287.4 million and for the Powerball prize the figure is $ 262.5 million.
Most of the winners have chosen to receive the cash, which is what the experts recommend, since you will have better control of your total money.
Before the money is deposited to your bank account 24 percent of the money will be withheld from federal taxes. This means that the cash delivery of the Mega Millions of $ 287.4 million dollars will be retained close to $ 69 million which will leave you a sum of $ 218.4 million. In the case of Powerball the retention will be $ 63 million which will leave you a total sum of $ 199.5 million.
There’s still more
The maximum marginal rate of 37% of taxes It is applied to people with income above $ 518,400 if you file your tax return as single and $ 622,050 for couples who file a tax return jointly. This means that you will have a bigger tax return. However, in some states or cities the taxes could approach 50%.
The good news is that they can exist financial strategies to reduce what you pay in taxes So that’s the importance of having a tax advisor on your team.
In case you cannot claim your prize anonymously, maybe you should leave the city where you live for a while before the press or your family comes to visit you to borrow a little money from you.
If what you want is to make some kind of gift to the members of your family you will need to do some planning of that money with the team of experts.
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