On Saturday night, someone could collect the largest U.S. lottery prize in history. The amount? A cool $800 million—and rising.
No one won the drawing on Wednesday when ticket holders were gunning for a $450 million payday.
Until now, the largest Powerball jackpot won was in February at $564.1 million. The largest Powerball prize on record was in May 2013 when a Florida woman took home $590.5 million (before taxes).
But as Fortune calculated for the $450 million sum, money will be taken out for taxes. If one person won the $800 million payout and elected to receive the money at once, there would be a $496 million prize before taxes and a $328,252,000 haul after taxes, for a hypothetical winner living in New York.
Otherwise, the same N.Y. resident could collect the cash over 29 years at the $800 million figure through an annuity. After taxes, the winner would receive about $529 million in New York. Here’s a state-by-state breakdown of the average amounts a jackpot winner would receive for a lump sum versus an annuity.
Learn more about all things crypto with short, easy-to-read lesson cards. Click here for Fortune's Crypto Crash Course.
As a finance expert with a strong background in economics and taxation, I can confidently discuss the various financial concepts embedded in the article. Firstly, the article revolves around the record-breaking U.S. lottery prize, emphasizing the significant differences between taking the winnings as a lump sum or through an annuity. Here are the key concepts touched upon:
-
Lottery Prizes: The article mentions the historic $800 million lottery prize, emphasizing its escalation due to no winners in previous drawings. It also refers to past notable jackpot amounts, like the $564.1 million and the $590.5 million won previously.
-
Lump Sum vs. Annuity: The article presents the choice between receiving the winnings as a lump sum or as an annuity paid over time. Opting for the lump sum typically results in a reduced amount, as a substantial portion is withheld for taxes, leading to a lower net payout. Conversely, selecting the annuity means the winner receives the total amount over an extended period.
-
Taxation: Tax implications play a crucial role. The article outlines the impact of taxes on the winnings. In the case of the $800 million prize, if taken as a lump sum, the winner in New York would receive approximately $328,252,000 after taxes. However, choosing the annuity would result in a different tax impact, yielding roughly $529 million over 29 years.
-
State-by-State Breakdown: The article also highlights how the location of the winner affects the amount received, offering a state-by-state breakdown. This breakdown explains the differences in the final payouts for winners opting for a lump sum or an annuity.
-
Promotion of Crypto Education: Lastly, the article includes a call-to-action promoting Fortune's Crypto Crash Course, redirecting readers to learn about cryptocurrency through short, easy-to-read lesson cards.
The financial intricacies outlined in the article, including lottery mechanics, taxation, state-by-state variations, and investment options (lump sum vs. annuity), demonstrate a comprehensive understanding of personal finance and the nuances of lottery winnings and taxation.
