Will you take the lump sum or annuity?
Each year, millions of people participate in the lottery with the hope of hitting the jackpot. Powerball lotteries provide winners of the jackpot with two options: Winners can either take the full jackpot amount in annual payments or you can choose to receive lump sum immediate payment, which is close to 50% of the jackpot amount. But many players are plagued with the option of which to choose.
For those interested in the annual payout, here are some simple guidelines to how the payout works:
- The full amount will paid over a course of 29 years, totaling 30 annual payments.
- Each year, the rewarded amount will increase based on percentages set in the Powerball gaming rules.
- Federal taxes deduct 25% from the overall jackpot.
- State taxes are deducted and vary by state. Taxes range from 0-9%.
For those interested in a lump-sum annual pay out:
- This payout is the cash value of the total jackpot.
- This jackpot usually amounts to approximately half of the total jackpot.
- Federal and state taxes are applied to the cash payout as well as the annuity.
All Powerball tickets cost $2, and a portion of each ticket cost goes back to directly benefit the state or territory. The state organizations benefitted by Powerball tickets varies from state to state. Powerball is available in 42 states as well as Washington D.C. and the U.S. Virgin Islands. To watch Powerball drawings live on your mobile phone, download the free Shoutz app, the Mobile home of Powerball.