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Mega Thousands and thousands $1.1 billion jackpot winner may face these pitfalls

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The Mega Thousands and thousands jackpot grew to greater than $1.6 billion on Aug. 9, 2023.

Justin Sullivan | Getty Pictures

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State taxes might be hefty

“None of those winners take into consideration taxes till they’ve a 3rd of it going proper to Uncle Sam and the state authorities,” stated Andrew Stoltmann, a Chicago-based lawyer who has represented a number of lottery winners.

None of those winners take into consideration taxes till they’ve a 3rd of it going proper to Uncle Sam and the state authorities.

Eight states — together with California, Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming — don’t levy income taxes on lottery winnings.

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Nevertheless, it’s essential to redeem the profitable ticket within the state the place you acquire it, which means an out-of-state buy in a high-tax state may set off a much bigger invoice.

However the annuity payout may save on future state taxes, relying on the place you select to stay, Stoltmann stated. The annuity consists of an preliminary sum adopted by 29 annual funds.

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Signal and safe the ticket

Lottery winners have a set timeline to return ahead and gather their cash — and some prizes have gone unclaimed.

“Signal your ticket, take photographs and scans after which safe it,” stated Michael Whitty, associate at regulation agency Smith, Gambrell and Russell, who has additionally suggested previous lottery winners.

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Mega Thousands and thousands says it is vital to “defend your self” by signing the again of your ticket. In any other case, anybody who holds the profitable ticket can file a declare to gather the proceeds.

Alternatively, there could also be methods to protect your privacy by claiming the prize cash by way of a belief or restricted legal responsibility company. Regardless, you need to seek the advice of an legal professional first.

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Keep away from a ‘authorized catfight’ on shared tickets

You might even have profitable ticket points when pooling cash with mates or co-workers, in response to Stoltmann.

“The nastiest authorized catfights occur when a gaggle of individuals purchase a ticket collectively” and one particular person claims they purchased the profitable ticket alone, he stated.

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You need to at all times have a “fundamental written settlement” that outlines who bought the tickets, the numbers on these shared tickets and the way the group will cut up the cash if there is a winner, Stoltmann stated.

2024 Tax Tips: New income brackets

Mega Thousands and thousands is not the one solution to win massive. The Powerball jackpot has ballooned to an estimated $800 million and not using a massive winner from Saturday evening’s drawing. The possibilities of scoring the grand prize for that sport are roughly 1 in 292 million.

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