Posted by 
THE Powerball player who hit a $526 million jackpot will have a decision to make when they come forward and collect their prize – and the move they make could be costly.
Mystery surrounds the identity of the gambler as they’ve not yet been unmasked following their big win.
A lottery player is sitting on a $526 million ticket after landing the Powerball jackpot[/caption]
The slip was bought at a 7-Eleven store in Anaheim, California, ahead of the draw on March 29.
Winners in California have one year to come forward and claim their Powerball jackpot, meaning the gambler has time on their side to get their house in order.
But, when they come forward, they will face a choice that produces huge consequences.
The winner could receive their prize as one payment, known as the lump sum.
But, this means the $526.5 million jackpot prize will be cut to $243.8 million.
That $243.8 million is the estimated cash value of the winnings before taxes have been deducted.
Winners who scoop more than $5,000 must pay 24% to the federal government.
This equates to around $58 million.
And, the size of their win could hurl them into the top federal income tax bracket of 37%.
But, the winner in California will enjoy a reprieve not all lottery players enjoy.
Winners do not have to pay state income tax on their winnings.
This also applies to players in Florida and Texas.
But, states like New York tax players at a rate of 10.9%.
Whereas, if they take the annuity, then they will receive an initial check and 29 payments each year.
Lottery winnings: lump sum or annuity?
Players who win big on lottery tickets typically have a choice to make: lump sum or annuity?
The two payout methods can impact how much money you get from your prize.
Annuities pay out slowly in increments, often over 30 years.
Lump sums pay all at once but in a smaller amount, as taxes are withheld in one go. That means 24% of your prize goes to Uncle Sam right away. Many states tax winnings as well.
Annuities can provide winners time to set up the financial infrastructure required to take in a life-changing amount of money, but lump sums have the benefit of being taxed only once.
Inflation is also worth considering when making a choice, as payouts do not adjust with the value of a dollar. That means that you’ll likely be getting less valuable money towards the end of an annuity.
Each state and game pays out prizes differently, so it’s best to check with your state’s lottery to confirm payment policies. A financial advisor can also help you weigh the pros and cons of each option.
Experts have varying opinions on whether to take the lump sum or take the annuity.
Checks will increase by 5% each year, according to the lottery.
The March 29 Powerball win came weeks after Oregon resident Abbas Shafii claimed his prize.
In February, he walked away with $146.4 million before tax having landed a $328.5 million jackpot.
He bought the ticket on January 17 at a Fred Meyer store in Beaverton, Oregon.
Meanwhile, a Mega Millions gambler in Illinois scooped the game’s $349 million jackpot following the draw on March 25.
The achievement marked the game’s second jackpot win of the year following a triumph in Arizona.
The U.S. Sun has reported how a series of changes will affect Mega Millions players in the coming days.
There will be larger jackpot prizes and players will have an improved chance of winning, according to officials.
Remember to gamble responsibly
A responsible gambler is someone who:
- Establishes time and monetary limits before playing
- Only gambles with money they can afford to lose
- Never chase their losses
- Doesn’t gamble if they’re upset, angry, or depressed
If you or someone you know is struggling with gambling addiction, call the National Gambling Helpline at 1-800-522-4700 or visit the National Council on Problem Gambling online.
Top lottery winners in the US
Millions dream of winning the lottery and finding fame and fortune. These are the biggest winners in US lottery history.
- Edwin Castro – $2.04 billion, Powerball, Nov. 8, 2022, in California.
- Theodorus Struyck – $1.765 billion, Powerball, Oct. 11, 2023, in California.
- Unknown winner – $1.602 billion, Mega Millions, Aug. 8, 2023, in Florida.
- Marvin and Mae Acosta from Los Angeles, California, John and Lisa Robinson from Munford, Tennessee, and Maureen Smith and David Kaltschmidt from Melbourne Beach, Florida – $1.586 billion, Powerball, Jan. 13, 2016.
- Unknown winner – $1.537 billion, Mega Millions, Oct. 23, 2018, from South Carolina.
- Unknown winner – he sued the mother of his child to keep his identity hidden – $1.348 billion, Mega Millions, Jan. 13, 2023, from Maine.
- Unknown winner – $1.337 billion, Mega Millions, July 29, 2022, from Illinois.
- Cheng and Duanpen Saephan, and Laiza Liem Chao – $1.326 billion, Powerball, April 7, 2024, from Oregon.
- Rosemary Casarotti – $1.22 billion, Mega Millions, December 27 2024, from California
- Unknown winner – $1.13 billion, Mega Millions, March 26, from New Jersey
