PHOENIX — It seems everyone in America is talking Powerball and who can blame them? An estimated $1.5 billion prize is quite a chunk of money, not to mention the largest lottery prize in world history.
Everyone has thought about what they would do with the jackpot if they hit it — get their entire family out of debt, splurge on the world’s most luxurious items, maybe even help out their fellow man.
But there’s a funny thing about the Powerball jackpot: These pesky things called taxes. The government is going to take quite the slice out of the winnings as part of both federal and state taxes.
Because we’re thinking about the jackpot ourselves we wanted to take a look at how Arizona compares to the rest of the nation when it comes to winning the Powerball, at least as far as taxes go.
The folks over at USAMega.com put together a handy rundown of how much money a jackpot winner would take home in each state after taxes, and even broke it down by taking the annual payments versus a lump sum.
As it turns out, Arizona is about the middle of the pack in terms of the actual dollar amount a winner would receive.
Should some lucky desert dweller hit the big bucks in Saturday’s drawing, he or she would have the option of a lump sum of $697.5 million or 30 years of $35 million payments. Math tells us that’s about $1.05 billion.
So what gives? Isn’t the prize $1.5 billion? It is, but thanks to the 25 percent federal tax and the 5 percent Arizona tax (make that 6 percent for non-Arizona residents), and you’re handing over millions to the government.
Some places in the U.S., such as Washington, D.C., Maryland and New York, require winners pay over 8 percent in taxes. This means winners would lose another $60 million or so, should they take the higher-paying annuity option.
However, there are 10 states — California, Delaware, Florida, New Hampshire, Pennsylvania, South Dakota, Tennessee, Texas, Washington and Wyoming — that do not tax lottery winnings. Basically, if you’re feeling lucky, it’s better to fly or drive over, buy your winning ticket and head back home to await your winnings.
After all, that plane ticket will seem super cheap after you buy your own private jet.
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