The Truth About a Lump Sum Payment in Idaho
By now, you’ve heard that the Mega Millions jackpot has ballooned to a whopping $1.02 BILLION or $1,020,000,000… that’s a lot of zeroes! The next drawing is this Friday at 9 PM and people are already talking about what they would do with their money. It’s a popular conversation starter and one that could be had with friends or family anywhere. The question should be, however, how much of the lottery winnings would you actually take home after taxes? Better yet – do you go for a lump sum payment or sign up to receive annual payments for the next 30 years? You’ll be subject to whatever tax laws are in the year that you claim your money so you’ll need to be careful in your decision.
When it comes to lottery winnings, the federal government will tax 24% right off the bat and each state has its own law on how much they tax. Surprisingly enough, California is one of the best states to win the lottery in while Wyoming is among the worst.
Today, we’re looking at each state’s tax rate on lottery winnings and using that with the federal tax rate to determine how much you would actually take home. This is assuming you were to go with the lump sum payment of $602.5 million of the $1.02 billion jackpot.