What to do if you win the Powerball
(ABC 6 News) – Winning the lottery is something most people have dreamed about since they were little kids.
The Powerball Jackpot is now sitting at an all-time high of 1.9 billion dollars. If the lucky winner takes the lump sum, they’ll still get over 900 million dollars. But if you don’t make the right financial steps, that money could be gone within a year.
Joseph Mahoney is a certified personal accountant in Rochester. He broke down some of the best ways to protect your winnings.
“The first thing you need to get is an attorney,” Mahoney said. “Get a financial advisor who can handle that kind of funds and a CPA to help you with the influx of cash and funds coming in and how to handle it correctly.”
Assembling a team is just one part of a few things you should do. Lottery winners should also make multiple copies of their winning ticket and put the real one in a safe or bank deposit box.
It’s also advised to keep the information as private as possible and not to share the news on social media.
“You may even consider moving,” Mahoney said. “The last thing you want is for someone to follow you or one of your family members home.”
Then there’s the big question. Do you take the lump sum or the annuity?
While most people may lean toward the lump sum, Mahoney says an annuity is a safe option for those who already struggle with their finances.
“The pro of the annuity option is you get it every year,” Mahoney said. “You’re only taxed for the portion you get it that year and for the next 30 years you have a string of income coming in.
“It’s really a good option for those who struggle at budgeting.”
But if you do take the lump sum, there is a clever way to help your family and friends without losing money to taxes.
According to Turbo Tax, you can give up to 16 thousand dollars to anyone you want, without those gifts counting against your $12.06 million lifetime exemption. But it’s still advised to fill out a gift tax form even if you don’t owe anything.
If no one wins the Nov. 7th Powerball drawing, then the jackpot will increase to over 2 billion dollars.