The Mega Millions jackpot has soared following a winless weekend, so it’s more crucial than ever to be prepared to cash in your winnings. Lotto excitement is on the rise again.
Estimates put Tuesday night’s top Mega Millions reward at $875 million, making it the sixth-largest payout ever. If you happen to win the Mega Millions, you better be ready to maintain your composure—your odds of doing so are 1 in 302.6 million. The best course of action, according to financial advisors, is to keep quiet and disable social media so you aren’t tempted to post about your victory, no matter how much you want to.
The claimant may face scrutiny from tax authorities, con artists, and loved ones seeking financial assistance if they make such a claim, they warn.
“If you’re lucky enough to win the lottery, keep it quiet,” advises Rob Burnette of Outlook Financial Center in Troy, Ohio, who specializes in financial and investing matters. “Arrange everything and decide what to do. Think about maintaining your anonymity if you can.
“The crooks usually try to get you to wire money for “taxes” or “fees,” or they may try to get you to give them a bank account number, which they will then clean out,” Mega Millions cautions, in the event that they contact you to inform you that you have won or if they know you have won. “No real lottery tells winners to put up their own money in order to collect a prize they have already won.”
If someone contacts you out of the blue, you should be wary. Never would a representative from Mega Millions contact you via phone, text, or email to inform you that you won a prize. If you win in certain states, you have the option to stay anonymous.
A lot of lottery winners have come to Steve Azoury’s attention, and he has advised them all. One such winner, who won $181 million, even went so far as to declare, “If I didn’t know you before, I don’t want to know you now.”
What are you going to do if you can’t just announce your victory?
Azoury recommends seeing a tax accountant and attorney as soon as possible, followed by a financial advisor. “They’ll collaborate closely to devise the strategy.”
You will be able to choose from several payout options in the plan:
An annuity option will pay out a lump sum plus 29 further payments at regular intervals. Every installment is five percent more than the one before it.
All of the money from the jackpot can be yours with the cash option, which is a single, large payment. There will be a drawing for $413.5 million on Tuesday.
A “fall guy” should also be part of the strategy, according to Azoury. That’s the advisor or person who says all the money is invested and hence unavailable, and who prevents you from lending to anybody. Unfortunately, we are unable to assist you at this time and are uninterested in working on your project.
Is it better to pay in installments or everything at once?
Your age, your objectives, and the rules of the lottery regarding the continuation of payments to beneficiaries—or the likelihood that you would fritter away a lump sum—should be considered while making this option.
This is something to think about, according to Mark Steber, chief tax officer at Jackson Hewitt:
How much you win from the lottery: How much you win will affect how much you owe in taxes and how secure your financial situation is going to be. It might be quicker to pay all the taxes at once if the amount is smaller, but then there’s that extra hassle.
Profits now and in the future: Things to think about include lifetime tax rates and your earning potential. Taking out an annuity would mean paying taxes on each payment.
Avoid doing this:12 steps to take before, during, and after a lotto win
Keep that in mind: For months, a woman from Washington state completely disregarded her lotto ticket. Next, she won a substantial sum.
Tell me how much money you make.
How you choose to handle your funds and the intricate rules of your jurisdiction will determine that.
In all likelihood, you will be catapulted into the highest federal tax bracket upon winning the jackpot. Your tax liability may vary substantially depending on your residence state and the location from where you purchased the winning ticket.
The federal tax rate is 37% if you are a resident of California and buy your ticket there. Fortunately, lottery wins in California are not subject to taxes, according to Steber.
On the other hand, if you happen to be a California resident who happens to be on vacation in Rhode Island and happens to purchase a ticket while there, you’ll need to take care of your federal and California tax returns with your lottery winnings, and then file a separate tax return for Rhode Island as a nonresident for your jackpot. To avoid paying taxes twice on the same income, he suggests that you include a tax credit for Rhode Island on your California return.
Your lottery wins will not be subject to taxes in the Golden State. According to Jackson Hewitt, there are other states:
Alaska
Delaware
Florida
Nevada
New Hampshire
South Dakota
Tennessee
Texas
Washington
Wyoming
A tax expert is “really useful” in this situation, according to Steber. “City taxes aren’t always easy to understand.”
After winning the Mega Millions, how long until I can get my hands on my prize money?
It shouldn’t take too long once you claim the prize, says Azoury. So, “maybe a couple of weeks,” he says.
Keep in mind that setting a strategy takes time, so most people won’t cash in their earnings immediately. To find out how long they have to file a claim for a certain ticket, they should contact the state lottery in which they bought the ticket.
“Winning tickets must be redeemed in the state in which they were purchased, but lotteries typically have a claim-by-mail option for most prize levels,” according to Mega Millions.
The lottery announced that the claim period for Mega Millions is between ninety days and a year from the date of the draw.
For the time being, where should I keep my funds till I make a decision?
If you’ve won a significant jackpot in the lottery, Azoury says you should consider where to put the money until you consult a financial advisor, tax accountant, and lawyer.
“One suggestion would be putting your winnings in a brokerage account, as many brokerage firms can spread the cash deposits across multiple banks,” according to him.”Within one brokerage account, up to $4 million can be insured, if single, and up to $8 million can be insured on a joint account.”
How can I participate, and when will the drawing be?
On Tuesday at 11 p.m. ET, there will be another drawing. Friday night will be the next drawing if nobody claims the prize.
Ticket prices are $2 each. Players have the option to choose six numbers from two sets of numbers: one set including numbers 1–25 (the gold Mega Ball), and another set containing numbers 1–70 (the white balls). They can also choose Easy Pick or Quick Pick. If your numbers match the six winners in a drawing, you will win the jackpot.
How can I improve my chances of winning?
According to some, you may be able to increase the one in 302.6 million probability of matching all of the Mega Millions numbers.
A website that provides information about lotteries, LottoAmerica.com, suggests looking at the frequency of selection as one approach. The most frequently drawn white balls are 10, 3, 17, and 14, followed by 31, 46, and 64 (tied), and the most frequently drawn gold Mega Balls are 11, 22, 18, 24, and 13, according to the statement. This information is based on data from October 2017, when the primary ball pool was reduced from 75 to 70 and the Mega Ball pool was increased from 15 to 25.
Some people enjoy viewing the “overdue” numbers, which have been unselected for the longest period of time. The numbers are 48, 56, 24, 63, 7, and 43, as reported by Mega-Millions.com, an additional website that provides lottery information. It indicated that the overdue numbers for the Gold Mega Ball are 23 and 19.