How States Handle the Lottery Jackpot
Among the most exciting things that happen to people is winning the lottery. But the odds of winning are not that good. And a lot of states have their own rules on how they handle the jackpot prize.
The first thing that you need to know about the lottery is that your winnings will be taxed. As of now, the top marginal rate on federal income tax is 37%. So, the majority of your winnings will be taxable. You may want to set up a team of professionals, including an attorney, a financial planner, and an accountant.
A lot of lotteries offer an annuity option. This means that you can choose to receive the entire jackpot or receive it over a period of 30 years. If you opt to receive the entire amount, you will be given a lump sum payment. However, most lottery players select the cash value option.
In order to win the Mega Millions jackpot, you need to match five numbers from 1 to 70. You can also take the annuity option and opt to receive the money in 30 annual payments.
Powerball is a multistate lottery that operates in 45 U.S. states. It is not available in Alaska and Hawaii. Some states use the remaining proceeds from the lottery to fight gambling addiction.
For example, West Virginia spends the money on education. In Ohio, the lottery profits education fund helps support vocational programs and K-12 education. Other states also use the remaining cash for general purposes.