News

The Powerball jackpot is at one billion dollars!

Literally everyone has dreamed about winning the lottery, and now someone could become the newest billionaire on the block. Or is it? See below to learn which states allow the winner to take home the biggest amount.

Advertisement

Learn which states in the U.S. offer the biggest amount after taxes.

powerball
Someone could become a billionaire this week. Source: Unsplash.

Some lucky person can become the newest billionaire on the block this week. The Powerball lottery just hit its second-highest prize ever at $1 billion. However, how much of that amount you’ll take home if you win depends on which state you reside. Plus, if it charges taxes on lottery winnings. 

The next Powerball draw takes place Monday night. According to the Multi-State Lottery Association – which runs the Powerball –  in case there’s a winner, it’ll be the fifth-largest payment in American lottery history. To win, the person must match all numbers from the draw, which are six total. 

Powerball winners can choose whether to take the full amount, but as an annuity for a 30 year period. Or, take a lump sum that’s worth about 50% less than the total prize. 

Although it might seem illogical to accept less than half of the original amount, many winners choose that route. That is because, after consulting with a financial advisor, they realize they can reinvest the money right away.

Regardless, the actual amount you’d be able to take home depends on the taxes incurred in the state you live in. 

Which states would charge less taxes on a Powerball win

powerball
Learn in which states you’d go home with the largest amount. Source: Unsplash.

All lottery winners must pay federal taxes, and currently, there are only a handful of U.S. states that don’t charge state taxes on lottery prizes. They are: Wyoming, Washington, Texas, Tennessee, South Dakota, New Hampshire, Florida and California. 

Other states charge taxes between 2.9% and 8.8% in Powerball or other lottery winnings. So if you live in any of the states depicted above, you’d take home the largest amount.  

Federal taxes eat away the most value. Right out of the bat, there’s a 24% withholding tax on lottery winnings. Plus, with such a large amount, you’d likely owe something close to 37% in federal taxes on your tax return for 2022. That is the top rate for people who have the highest income. 

According to Powerball, you’d take home about $630 million if you choose the annuity alternative – which pays the most over time. That is, of course, in those states that don’t charge income tax on lottery prizes. If you choose the lump sum, the value decreases significantly, and you’d get $307,5 million.

What is the most expensive thing in the world right now?

If you need inspiration of what to buy if you win the Powerball, we’ve got you covered. Check the link below to learn what is the most expensive thing in the world. With so much money, you surely will be able to splurge a little. 

man with a lot of money to spend on most expensive things

The number one most expensive thing in the world

What is the one most expensive thing you could buy? Check out this post to learn the number one most expensive thing in the world and see if it's worth it.

Trending Topics

content

Learn how to see your Spotify Pie

Ever wondered what music genres you listen to the most? Wonder no more with our new Spotify Pie generator! Read on for more.

Keep Reading
content

Foods that make you happy – according to science!

According to scientific research, there are some types of foods that can make you happy. Curious as to know what they are? Read on for more!

Keep Reading
content

What is the meaning of YOLO?

Do you know the meaning of yolo? This post will tell you everything you need to know about the popular acronym.

Keep Reading

You may also like

content

How to claim Child Tax Credit and Stimulus payments

If you still haven’t claimed your Child Tax Credit or Stimulus payments, you’re running out of time to do so. Check how you can do it here!

Keep Reading
content

An 85-year Harvard study found the No. 1 thing that makes us happy in life

Harvard researchers have spent the last 85 years studying what makes us happy, and they've come up with a pretty surprising answer.

Keep Reading
content

See how to apply for the Tomo Credit Card

Learn how to easily apply for the Tomo Credit Card online and get started on improving your credit score with this innovative product.

Keep Reading