DES MOINES, Iowa - Though the odds of winning don't change as the jackpot increases, there is a higher chance that the prize will be split among multiple winners. This can lead to lawsuits among the winners.
It has happened often enough that lawyers and lottery officials advise people participating in a pool, either at the office or among friends and family, should get everything in writing.
They also advise to only enter the pool with people you trust, assign a pool leader who will track the money, possible winnings and make photocopies of tickets. Also, don't add people to the pool if you roll the winnings forward and buy more tickets.
Despite the low chance of winning, Luckylottos.com the 2, 17 and 31 are the three most frequently drawn Mega Millions numbers.
If by chance it's your lucky day and you do win, here are some answers for someone holding that prized lottery ticket for what would be the largest lottery jackpot in U.S. history.
I'VE WON. NOW WHAT?
Lottery officials recommend winners take a deep breath, put their winning ticket in a safe spot and consult with a reputable financial planner before popping over to the lottery headquarters. Their first decision is whether to take the cash option, which would be $904 million, or an annuity, with one initial payment and annual installments over 29 years. To put that in perspective, that is more than Jay-Z's net worth or 10 Space X launches, according to NBC.
Nearly all winners opt for cash, but the annuity has advantages, as it reduces the tax bill a little and offers a stable flow of income that climbs by 5 percent annually.
HOW LONG DO I HAVE TO CLAIM THE JACKPOT?
States have different rules, so depending on where you purchased the ticket, you have from 180 days to a year.
DO I GET MY MONEY INSTANTLY?
No, you can't just cash one of those oversized checks shown in all the winner photos. Payment speed also varies by state, but a week or two is common. Carole Gentry, a spokeswoman for the Maryland lottery, said the requirement is seven to 10 days in that state.
CAN I KEEP MY NAME SECRET?
Jackpot winners can remain anonymous in eight states - Delaware, Georgia, Kansas, Maryland, North Dakota, Ohio, South Carolina and Texas. In Arizona, people who win more than $600 can keep their names secret for 90 days after claiming prizes, but after that names are public record. In Michigan, winners are anonymous unless they win Mega Millions or Powerball prizes.
WHAT ABOUT TAXES?
For winners of $5,000 or more, all states automatically deduct 24 percent in federal taxes, but state taxes vary widely. Some big states, including California, don't withhold taxes from lottery winnings, and some like Texas don't have individual income taxes at all. For the others, the state takes a bite, especially in New York, where a winner would need to pay a state tax of 8.8 percent. Residents of New York City would pay an additional tax of 3.9 percent. In general, taxes eat up nearly half of winnings.
Melissa Labant, a tax policy expert at the American Institute of Certified Public Accountants, said winners should realize that while taxes are initially withheld when prizes are awarded, more money will likely be due at tax time as people suddenly are in up to a 37 percent tax bracket.
"That catches people off guard," she said. "You have to be prepared to write another check to the IRS in April."
WHAT ARE MY TAXES IF I DON'T LIVE IN THE STATE WHERE I BOUGHT THE TICKET?
This can get complicated, but for the most part winners pay taxes where they bought the ticket and then can get a credit on their taxes in their home state. The final tax bill can depend on if the state where you live taxes at a higher or lower rate than where you purchased the ticket. Rules vary by state, so this is a good topic for that financial planner.
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