|Posted: January 30, 2007, 11:02 am - IP Logged|
It sounds like the federal tax rate right now, according to you, is 35% if you take lump sum, but 33% for annuity. Better read it again.
Cash Only...regarding the Federal tax rate, my comment is that if someone took the annuity, using current tax rates, for the first seven years the federal tax would be 33%. This is because in the current federal tax schedule the tax rate for income between $195k and $349k is 33%. The Powerball graduated payout schedule for a $15 million jackpot puts the payouts below $349k for the first seven years. Based upon the above the tax rate for the annuity is 33% for the first seven years and then 35% for the remaining years. Now with the next Powerball Jackpot of $20 Million all payments would be greater then $349k and taxed at 35%.
If you read my post thoroughly you will see I never said the tax for the entire annuity (as you have perceived) was 33%. Is there something I am not reading correctly? Might this make you think the tiniest bit about an annuity? Probably not!