The Mega Millions jackpot is over $1.6 billion on August 9, 2023.
Justin Sullivan | Getty Images
State taxes can be hefty.
“None of these winners think about taxes until a third of it goes to Uncle Sam and the state government,” said Andrew Stollman, a Chicago-based attorney who has represented many lottery winners. is represented.
None of these winners think about taxes until a third of it goes to Uncle Sam and the state government.
Eight states – including California, Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming – do not tax lottery winnings.
However, you must redeem the winning ticket in the state where you bought it, meaning an out-of-state purchase in a high-tax state could present a big bill.
But paying an annuity can save on future state taxes, depending on where you choose to live, Stoltman said. An annuity consists of an initial sum followed by 29 annual payments.
Sign and save the ticket.
Lottery winners have a set timeline to come forward and collect their money — and some prizes go unclaimed.
“Sign your ticket, take pictures and scan it and then save it,” said Michael Whitey, a partner at the law firm Smith, Gambrill & Russell, who has also advised lottery winners in the past.
Mega Millions says it’s important to “protect yourself” by signing the back of your ticket. Otherwise, any winning ticket holder may file a claim for collection.
Alternatively, there may be ways to protect your privacy by claiming the prize money through a trust or limited liability corporation. Regardless, you should consult with an attorney first.
Avoid ‘legal battles’ over shared tickets.
According to Stoltmann, you may also have problems winning tickets when pooling with friends or co-workers.
“The nastiest legal battle is when a group of people buy tickets together” and one person claims to have bought the winning ticket alone, he said.
Stoltman said you should always have a “basic written agreement” that outlines who bought the tickets, the numbers on those shared tickets and how the group will split the money if there’s a winner.
Mega Millions isn’t the only way to win big. The Powerball jackpot has reached an estimated $800 million from Saturday night’s drawing without a big winner. The odds of scoring the grand prize for this game are approximately 1 in 292 million.
Credit : www.cnbc.com