Winning the USD500M Powerball. I'm Deflated My Take Home Would Only Be USD187M
Thursday, November 29, 2012 at 8:15PMI was really surprised that you only take home USD187 million from winning a USD500 million lotto. In the Forbes video below, Deborah Jacobs stuns me into reality.
As she explains, if you take the winnings now you are only entitled to USD327 million, not bad but then Uncle Sam needs to get paid. If it were just for Federal Taxes, the USD327 million would be tagged for another USD114 MILLION or 35% leaving USD213 million . Still not too bad at almost half the original USD500 million but wait...there is more pain.
With all the other state taxes, the final take home is a mere USD187 million. USD187 million after winning USD500 million? It makes me really wonder why one plays the lotto in the first place. Seems like highway robbery!
There's a way though, apparently, to get around the taxes. Yes there is...move to Pennsylvania! Pennsylvania has no tax on lottery winnngs. Now that spells sense and makes taking that USD500 million lotto gamble all the more fun.
By the way, Deborah explains the alternative to not taking the lotto winnings upfront...take the proceeds over 29 years! Now with money in the bag, places to go and people to see, who would ever wait 29 years?
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