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Millions of players can let daydreaming continue.
Since no one hits all six numbers on Friday, the jackpot has jumped to approximately $376 million. The next Powerball round, scheduled for Saturday night, is set at $341 million.
Of course, due to tax reasons, if you manage to beat the astronomical odds of winning a single lottery ticket (1
Experts say that despite this, the unexpected windfalls of your life may be overwhelming. And, although you may be eager to get a bonus, experts say that it is best not to rush to the lottery headquarters on the day you find yourself lucky.
In other words, take a deep breath.
Doug Boneparth, President of Bone Fide Wealth and New York State Certified Financial Planner, said: “The first thing I recommend is to build a professional team to handle many aspects of obtaining this type of funding.”
The team should include an accountant, financial consultant and lawyer. If you win the jackpot, there are other things to note.
Annuity or one-time payment?
You can choose whether to make the bonus as a one-time payment or an annuity over 30 years. For the millionaire’s $376 million jackpot, the cash option is $287.4 million. For the $341 Powerball bonus, the amount is $262.5 million.
Experts usually recommend taking the money all at once, which is what most winners will get.
Boneparth said: “Preferential one-time payment.” “This will allow you to better control your funds.”
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However, he added a warning.
Boneparth said: “If you are not disciplined or even afraid to invest with assistance, then annuities may be a better option.”
Before you receive the money, 24% of the federal tax will be withheld. For Mega Millions’ US$287.4 million cash option, this means that approximately US$69 million is worth only US$218.4 million. For Powerball’s one-time payment of US$262.5 million, the withholding will be US$63 million and the remaining US$199.5 million.
However, this is not over yet. The highest marginal tax rate is 37%, which applies to single taxpayers whose income exceeds US$518,400 (income declared jointly by husband and wife is US$622,050), which means that the tax rate should be higher when paying taxes. Also, there may be withholding or state taxes payable.
“In some places, when you consider city, state, and local taxes, you might consider [close to] 50% is taxed. “Boneparth said.
There may be strategies to reduce the taxes you pay, which is why it is crucial to have tax advisors in your team.
If you cannot claim bonuses anonymously (depending on the state), you may skip the town for a while. Both the public and the extended family may cause unnecessary attention.
“Once your fifth uncle is dismissed, he may catch you,” Boneparth said. “Find a comfortable place and walk away.”
Also, if you want to share some money with family or friends, plan these gifts in advance, Boneparth said.
He said: “You have to avoid repeated harm.” “You can set expectations in advance. That’s when the plan really works.”