A MAN won $1 million, but because he chose to get the money all at once, he now has less than half of it.
Ethan Benedict of Petersburgh claimed his $1,000,000 prize from the Pink Panther Diamond 7 scratch-off game from the New York Lottery.
But after the required deductions, he was left with $455,700.
Stewart’s Shops, which is at 2 River St. in Hoosick Falls, is where the lucky ticket was bought.
The New York Lottery said on Wednesday that there is still one open Pink Panther Diamond 7’s top prize.
Anyone who wins has to report it, which could put them in a higher tax bracket, but it depends on how much they won.
Because they could win so much, they might have to pay a lot of state taxes.
When people gamble in New York, they have to pay an extra 10.9% tax on top of what they owe the federal government.
Some states, like Florida, do not tax people who win the lottery.
People who win a lot of money at gambling do not have to pay taxes on it in this state.
People in California and Texas can play by the same rules.
There are also states like New Hampshire, South Dakota, and Tennessee that do not tax lottery prizes.
Gamers in Oregon, Maryland, and New Jersey have to pay at least 8%.
One thing a winner thinks about before deciding whether to take the lump sum or the annuity is how much tax they have to pay on their prize.
The annuity is a less popular choice, but players will get payments spread out over many years.
For example, Mega Millions winners will get one payment and then 29 checks every year.
Every payment is 5% more than the last one.
JACKPOT RISKS
Robert Pagliarini, a financial expert, told The U.S. Sun that giving up the lump sum has its own risks.
“If you take the lump sum, you need to know that you can not go back if you make mistakes or bad investments,” he said.
“You are not likely to win the lottery again.” You only get one chance to do this.
He talked about how taking the annuity gives winners more freedom to make decisions that could be bad in the years right after they win.
A lawyer named Andrew Stoltmann who works with lotteries told The U.S. Sun that about 90% of winners make the mistake of taking the lump sum option.
Lottery winnings: lump sum or annuity?
People who win a lot of money on the lottery usually have to decide between a lump sum and an annuity.
How much money you get from your prize can change between the two payout methods.
A lot of the time, annuities pay out slowly over 30 years.
When you get a lump sum, you pay all at once, but the amount you get is less because taxes are due all at once. That means Uncle Sam gets 24% of your prize right away. Wins are also taxed in many states.
Annuities can give winners time to get their finances in order before they get a life-changing amount of money, but lump sums are taxed only once, which is an advantage.
When making a choice, you should also think about inflation, since payouts do not change with the value of a dollar. That means the money you get from an annuity will probably be worth less as the term goes on.
Since prize payouts are different for each state and game, it is best to check with your state’s lottery to make sure you know how to get your money. A financial advisor can also help you think about what is good and bad about each choice.
Different experts have different ideas about whether you should take the lump sum or the annuity.
