So You Won The Powerball ..Now Pay The Taxman!

Yep…You just won a projected 1.5 billion dollars!!!! Where are going?!!! Well absolutely nowhere until Uncle Sam gets his. According to an article on cnbc.com .

It’s not simply an issue of the odds — although the Multi-State Lottery Association puts the chance of winning the grand prize at 1 in 292.2 million. Or the implications of having to share Wednesday’s record-high pot if there are multiple winners. It’s the taxes that’ll get you. –cnbc.com

BUT, before you even think about visiting Uncle Sam, one other huge decision must be made: Do I take the money and run, or do I spread it like jam on a biscuit over 30 years. If you spread it out over the 30 years then , $1.5 billion initially is yours. If you want it all now, it’s a 38% fee. In simple terms , you would get only : $938 million. Absurd.

NOW, here comes Uncle Sam for his cut. Your winnings have put you in an elite group, the 1%’ers. You will pay the highest tax bracket at 39.6%. Sure, there are loopholes and such that a great accountant and good tax lawyer can get you through, but:

“If they win the jackpot, they’re going to be subject to the highest federal tax rate of 39.6 percent,” said Melissa Labant, director of tax advocacy for the American Institute of Certified Public Accountants. “It’s a lot more significant than folks expect.” Nor are there many workarounds to substantially cut that bill. “You’re not the type of consumer the U.S. government is looking to give a tax break to,” she said.–cnbc.com .

Here’s the breakdown:

• The U.S. government automatically withholds 25 percent of such large prizes if the winner is a citizen or resident with a Social Security number.
• For someone choosing the lump sum, that reduces take-home winnings by $232.5 million.
• Residents who don’t have a Social Security number, or fail to provide one, will have 28 percent withheld.
• Non-Residents of the U.S. have 30% held back.
• Winners will have to pony up the remaining 14.6 percent in federal taxes come tax time in April 2017.

So after federal taxes, you’d be left with about $561.7 million.

So good luck!! Uncle Sam is rooting for you!

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