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Florida Lottery Winner Is Luckier Than You Think

(Photo by Justin Sullivan/Getty Images)

The feeding frenzy is over. We can all stop mentally spending the $3-$400 million dollars had we won. We all have to wait until the next big Powerball jackpot comes along.

Lotteries have become “cash cows” for many states. Delaware, Georgia, Ohio, Oregon, Rhode Island, South Carolina, South Dakota, Texas, Washington and West Virginia all receive more money from lotteries than from corporate taxes.

The North American Association of State and Provincial Lotteries reports lottery sales of $68.7 billion in 2012 resulted in a 9 percent increase from the previous year.

Winner Is Lucky to Be In Florida

The winning number drawn last night belongs to a lucky winner or winners, if a group pooled their cash, from Florida. You might be thinking how lucky that person or persons must feel. Well, they are about to feel a lot luckier.

Lottery Tax Facts

Where you live can have a major effect on how much of the grand prize you get to take home and what you can do with those winnings. Here are some quick facts about winning the lottery.

  • Living in Florida will pay off big for this winner because it’s one of ten states that do not tax lottery winnings. Others are Alaska, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. However, if you lived in Wyoming and bought your ticket across the border in Montana you would owe big bucks to Montana.
  • Hawaii doesn’t have a lottery but if you bought a Powerball ticket in another state you will be hit with a $41.5 million Hawaiian state tax. Your lowest state tax rate will be Indiana at $12.8 million.
  • If you were a New York resident you could expect to pay about $197.1 million in taxes to the feds, state and city. That’s about half your total winnings if you opted for the lump sum payment.
  • Since this is a cash payout that would put you in the new 39.6% tax bracket giving you a federal tax bill of about $149.3 million. Pretty hard to come up with enough deductions to offset that hit.
  • You probably want to give some of the money to your loved ones. Uncle Sam is ready for you. If you give any one individual more than $14,000 in a single year your friendly tax man is going to request a 35 percent federal gift tax. In addition to that, 22 states plus the District of Columbia will want a state gift tax as well. So don’t pull the checkbook out too fast until you check with your tax attorney.

Some Final Thoughts

A paycheck of some $300 million would certainly be a life-changing event for the majority of us. We’ve all read and heard horror stories of how too much money results in bad experiences to good people. Some are totally broke again just a few years later.

Others use their winnings to make a positive change in society. But however you spend or invest the winnings it would sure be fun to have those decisions to make. I’m thinking I’d end up with more friends and relatives than I ever knew I had.

What would you have done with your winnings?

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