Annuity: The full $248 million is paid out over 30 installments across 29 years, with annual payments increasing by 5%.
Lump Sum: A one-time cash payment, which is the present cash value of the jackpot. For a $248 million jackpot, the lump sum is approximately $113.4 million.
Lottery winnings are subject to federal income tax. The IRS requires an initial withholding of 24% on gambling winnings over $5,000.
Annuity Option: Each annual payment is taxed as ordinary income in the year it's received.
Lump Sum Option: The entire amount is taxed in the year it's received, which could place you in the highest tax bracket.
State taxes on lottery winnings vary. Some states impose their own taxes, while others do not tax lottery prizes. It's essential to consult with a tax professional familiar with your state's laws to understand your specific obligations.
Consult Professionals: Engage with financial and tax advisors to navigate the complexities of your newfound wealth.
Plan for Additional Taxes: Be prepared for potential additional tax liabilities beyond initial withholdings.
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