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Of course, the two winners who share the jackpot of $ 687.8 million Powerball will not end up with the amount announced. Whether they take their share in the form of a lump sum or an annuity spread over three decades, federal and state taxes will absorb much of their exceptional profits.
"The winners are surprised by the amount of taxes withheld on the upfront payment and then by the extra amount that they have to pay with their taxes the following year," said Jason Kurland, partner at Rivkin Radler, a York cabinet.
"All the numbers involved in these huge jackpots are staggering, and taxes are no exception," said Kurland, who helps big winners in the lottery navigate unexpectedly.
If the winners accepted the immediate lump sum payment, they would each start with $ 198.1 million (compared to the $ 343.9 million they would receive if they chose the annuity). The federal government will eliminate 24% from the outset – and more will be needed at the time of the tax return.
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