So you won the lottery. With the Powerball pot reaching a historic $950 million over the weekend and rising again after there was no winner, people around the country have been buying tickets in droves. While any stake in a lump sum so large may sound like a lot of money, taxes can drastically reduce the take, and winners are encouraged to invest wisely.
With no winners announced throughout the weekend, the Powerball pot has continued to rise to a record $1.3 billion, lottery officials said. The next drawing is set to take place Wednesday, Jan. 13, and ticket sales have continued to spike.
Winners in New York City end up taking home the smallest sum, according to the Associated Press. All lottery winners have to pay 25 percent tax on their earnings, in addition to state and local taxes. For New York City Residents, that means an additional 8.8 percent state tax and a 3.9 percent city tax.
For the $950 million drawing, after taxes, most people would have been left with around $400 million. Past winners of the lottery have invested in real estate, paid off past debts and donated to charity. Jim and Carolyn McCullar, for instance, who won half of $380 million in 2011, said they weren’t going to spend it on anything lavish and would rather give some money to their children and give the rest to charity.
”I’m not going to fly all over the world and buy my own jet,” said Jim McCullar during a press conference, as reported by Fortune magazine, adding, “What this means to me is the legacy is going to go generation after generation after generation.”
A single mother from Idaho who won the other half of the $380 million jackpot in 2011 quit her job in customer service. "That's awesome! I won't have to pay child support!" her husband told AP soon after her winnings were reported.