$241 MILLION: Mega Millions lottery frenzy ramps up

PB gets no consideration from me when I visit a convenience store.  Why should I pay $2 for ONE chance to hit $41 million (I only consider cash value) when I could spend the same $2 for TWO chances to hit $171 million?  Why I even threw a buck toward Little Lotto that had a jackpot prize of a mere .525 million (or 525K for those who are in denial you need glasses and can't see the decimal point in front of those numbers) last night.  IF I win MM come Tuesday, it will indeed be a Super(b) Tuesday for me and certain businesses.  Maserati, Bentley, get ready for another cash rich client.  No need for any financial advisors to bother soliciting me for any business since I have that covered.  Ditto for my legal team, but I will be interviewing accountants who can keep me from suffering same fate as Richard Hatch, Wesley Snipes, Willie Nelson, Jim Thorpe, and believe me when I say I will be keeping my eye on my prize like Oprah lest I end up like Nicholas Cage...but that won't happen since I keep track of where my money is and what is going on with every transaction. 

Back to the subject.  PBS won't get any additional play from me until MM is hit.  Until then, I will just trust the single subscription play I have in for PB.  And when the day, hopefully March 20, comes when the ticket in my hands have all matching numbers, I won't have to put in a two week notice since I won't stop working for myself.  That is the beautiful thing about being either self-employed or a business owner in that hopefully you are doing something you really enjoy.  And I would tell this forum I won....but since I would have to attribute my win to luck, don't expect me to come on here hawking my tried-and-tested system that can help you win "just like me".  I think the only valid "system" is to just buy a ticket for every drawing to always give yourself a chance, and I would say that even to a person who may a won various online or scratch-off looters jackpots.  Consider someone who has won, say 3 to 7 big lottery prizes...well, ask the person how many times he/she has won NOTHING, and I bet the answer will be, "Thousands of times".  So those 3 to 7 wins look not so great and "assured". To clarify that, winning the prize is great, but the chances of winning are not improved by any system.

When I win I am taking the cash since taxes on the wealthy will skyrocket under Obama or any politician who cannot boldly cut govt spending and reform our out of control entitlement programs.  I will win and move somewhere where taxes are low.

Future tax rates are the unknown. If US income tax rates go as high as European countries, which is the target 'ideal' to some, then your annuity could be taxed at 50% or more. Your $9.3m annual annuity becomes at best $4.6m before state taxes. And what if inflation goes nuts? Think about the crazy inflation we had back in the 70's, what cost $1 in 1970, cost $44 26 years later. Your $4.6m could be worth $1.1m in 26 years.

And no, you cannot get out of paying taxes to either the state or the feds in those 26 years. You are locked in to the state you bought your ticket for the length of the annuity. 

Did someone say glass slippers weren't coming back?   I better go check my investments... 

LOL! America agrees with you, very few people playing PB for last night's draw.

It is SO WEIRDto pay $2.00 for 1 ticket. It always causes confusion with the retailer where they have to tell you" so you want ONE $2.00 Powerball ticket, right?"

Hopefully, PB will see the light and return PB to how it was.

Although lottery drawings are random (more so with the balls), and there are some patterns to this, most systems are just a gimmick.

Better to spend your hard earned money on QP's then on an over hyped "system". Persistence is key. Most big lottery winners as OldSchoolPa

eluded to, have probably played and lost thousands of times before hitting the big one.

My question isn't really about whether annuity is better than cash option . My question is about whether a state can tax you on the INTEREST that is earned after you leave the state when you choose the annuity option. There are all kinds of things that go into picking an annuity over a cash option including factoring in the unknown future...my question pertains to just one aspect of making that choice.

Thus I didn't need that poster to pontificate to me about what other lottery winners have done. Their choices are not relevant.

I just wanted to know if anyone had the answer about the interest and one that is not just a guess.

I would have to pull up in a Porsche 911 turbo S Cabriolet before anyone believed me. If i told them i hit the lotto and was quitting, they would tell me to go back to work.

All pontificating aside......you are taking the annuity option,therefor your payments gradually increase,so the lottery commission includes the interest in that next payment, then the payment after and so on. When that check is sent to you it comes from the state your purchased it in (Indiana)and they get to take state tax(interest included)...because the annuity and lottery paid interest is treated as income earned for that year, you are required to pay state income tax, even if you lived out of the country or another state...... Indiana has a state tax rate of 3.4% and you do the annuity..its going to go like this on annuity.....1st payment check would be (estimating roughly) 7.8 mil minus fed(35%) and Indiana state taxes(3.4%)...the next year the payment increases from 7.8 to lets say 8.1 because of their interest is added to your first payment....You still pay fed and state taxes on the 8.1 mil( base annuity plus interest) because that check is from the state of Indiana lotto commission. The next year the payment goes up to 8.3 and next is 8,5 and so on....so the total plus interest adds up to 241 mil over the 26 years.....Sorry, but you are required to pay Indiana state tax on that interest each year.....
     Next situation is you get your first scheduled payment of 7.8 million ..they take out 35% fed tax & 3.4 Indiana state tax..after taxes you clear 4.8 million....you take the 4.8 mill and invest it all.....as long as you claim residency in Indiana it is subject to that Indiana state income tax rate of 3.4 %....if you move to Wyoming or Florida or Alaska where there are no state income taxes, then no Indiana interest income can be assessed because you don't reside there.
      Bottom line is everyone of the 26 annuity checks(that includes lottery paid interest) that is coming from Indiana is always going to be subject to their 3.4% income tax rate no matter where you reside.

Thats why most folks take the lump sum, pay all the federal and state taxes for the current year. They eliminate any future tax increases by the FEDS or in this case the state of Indiana...hope that helps..Good luck in the next jackpot drawing.

Interest or investment income earned on investments you make off lottery winnings is only taxable in the state of your residence. If you take the annuity in Indiana, but then move to Wyoming establising residency, your annual annuity payment is still taxable in Indiana, but earnings off the annuity payments that YOU invest, are taxable in Wyoming. Except that Wyoming does not have income tax.

        I'm no tax expert, i even pay someone to file mine,don't want to pay a penny more than i have to.

if you like the idea of an annuity why not take the cash and buy your own or several, why be locked in to one,

you could even get short term and long terms,if you take the lottery's annuity, the state still has a way to get to it,

even if you live in another state that has no income tax,

Suckers take the annuity, if you were to have problems with getting the money at once then you're going to probably have problems with the annuity as well and top it off, you could have more. How many winners have taken the annuity, got into trouble and sold off payments? How many of those people ended up having significant tax problems as well? Lump sum or annuity, a fool and their money will part. The "safety" of the annuity is nothing but an illusion.

The cash option is currently about 70.5% of the annuity, I'd rather take the cash and have all the taxes on the principal taken care of in the first year before rate hikes that ARE going to come and be subject to taxes in a state I would no longer live in over the next 26 years and be at the mercy of the state and federal government's ability to "invest" it and hope the state you won it won't be issuing you an IOU at some point.. Even in this economy it wouldn't take much to beat out the return you'd get from U.S. Government Treasury Securities. Not to mention the ability to move your money out of the dollar if you so choose to.

Besides that, who knows if any of us will even be here 26 years from now.

Maybe if you pulled up in this car, there would be no questions asked:

I think it's about time Wisconsin win their first Mega Millions jackpot.  :)  I already turned my $3 winner from Friday into my Tuesday ticket.  Good luck everyone!! :)

I haven't yet decided how I will collect a MM or PB jackpot because I figure my chances of winning one are no better than those here sharing their plans to do so.