The video explains how much taxes the recent $699.8 million Powerball jackpot winner may have to pay. They explain that lottery winners do not take home the full amount advertised, as a large part is withheld immediately for taxes and the winner may owe more taxes during the next tax season. The winner could choose to take a lump sum amount or an annuity, which pays the full amount over 30 years. The speaker breaks down the estimated tax bill for each option and explains that the lump sum payment would result in an estimated tax payment of $228 million, leaving a net take-home pay of $268 million. In contrast, the annuity payment would result in an estimated $12.8 million net take-home pay per year, but over 30 years, the winner would pay $315 million in taxes. The speaker argues that taking the annuity payment offers the most earning potential over the next 30 years and provides more opportunities to use tax strategies to reduce taxable income.
– Someone just won the Powerball jackpot worth 699.8 million dollars, the seventh-largest jackpot winning in US history.
– Lottery winners pay taxes, and the winner does not take home the full advertised amount during the lottery.
– A large part of the lottery winnings are immediately withheld for taxes, and the winner may owe the rest during the next tax season.
– The winner would be bumped into a higher tax bracket, meaning they owe a larger percentage than what they’re used to paying to the IRS.
– The estimated tax bill for the recent 699.8 million dollar jackpot winner is approximately 228 million dollars if they take the lump sum amount of 496 million dollars.
– If the winner takes the annuity payment, they get the full lottery amount over a 30-year period, which is approximately 23.3 million dollars per year.
– The winner would likely owe about 8.5 million dollars per year in federal taxes if they take the annuity payment.
– If the winner lives in a state like New York, they would pay an additional approximately 45 million dollars in taxes if they take the lump sum amount of 496 million dollars.
– If the winner takes the annuity payment, they would pay about 2 million in taxes per year if they live in a state like New York.
– The net take-home pay of the winner would be 268 million dollars if they take the lump sum amount of 496 million dollars.
– The net take-home pay of the winner would be 12.8 million dollars per year if they take the annuity payment and live in a state like New York.
– If the winner takes the annuity payment, they would pay a total tax payment of 315 million dollars over 30 years.
– The taxes for the annuity payment are similar to the lump sum payment.
– The annuity payment gives the winner the most earning potential over the next 30 years.
– The winner can deploy different tax strategies every year to help reduce their taxable income if they take the annuity payment.