Iowa, New York Home to Winning $688M Powerball Tickets
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Iowa, New York Home to Winning $688M Powerball Tickets

Power Ball/PrtSc

DES MOINES, IOWA – October 29, 2018

After 21 weeks with no jackpot winners, Saturday night's Powerball drawing yielded two tickets that beat the odds and matched all six winning numbers (8, 12, 13, 19 and 27, with a Powerball of 4). The chance of winning is 1 in 292 million.

Two winning tickets were announced early Sunday. One was sold at Casey’s convenience store in Redfield, Iowa, a rural community of about 800 people roughly 35 miles west of Des Moines. The other was sold at West Harlem Deli in New York City. No winners immediately stepped forward. More winning tickets could be announced as results come in overnight.

The haul marks the third-largest prize in the game's history and the fourth-largest U.S. lottery jackpot ever.The jackpot was originally estimated at $750 million but worked out to $687.8 million by the time of the drawing.

There was no immediate word on who purchased the winning tickets. A clerk who answered the phone at the Iowa convenience store Sunday declined to comment and referred questions to lottery officials. The store will receive $10,000 for selling the winning ticket.

Iowa lottery officials said the ticket marks the largest lottery prize ever won in the state.

It also comes on the heels of a single ticket winning of$1.5 billion in the Mega Millions jackpot last week.That ticket was sold in South Carolina. For that game's next drawing on Tuesday night, the amount up for grabs seems paltry in comparison: $45 million. Powerball's jackpot also has reset to $40 million for Wednesday night's drawing.

Of course, the two winners splitting the $687.8 million Powerball jackpot won't end up with the advertised amount. Whether they take their haul as a lump sum or as an annuity spread out over three decades, federal and state taxes will eat up a big chunk of their windfall.

"Winners are surprised by how much is withheld in taxes from the initial payment, and then how much more is owed with they file their taxes the following year," said Jason Kurland, a partner at Rivkin Radler, a law firm in Uniondale, New York.

"All of the numbers involved in these huge jackpots are staggering, and the taxes are no exception," said Kurland, who helps big lottery winners navigate their windfall.

If the winners go with the immediate lump sum payment, they would each start with $198.1 million (versus the $343.9 million they'd each get if they were to choose the annuity). The federal government will shave off 24 percent right off the bat — and more will be due at tax time.

Winners can expect to owe the difference between that withholding and the top federal tax rate of 37% (applied to adjusted gross incomes of $500,000 or more). After that full rate is applied, the winner's take would be reduced by $73.3 million to $124.8.

On top of that are state taxes.

In this case, Iowa will withhold 5% of the win. However, its top income tax rate of 8.98% (8.53%  starting next year) will mean more owed at tax time. Applying that top current rate would reduce the Iowa winner's take by another $17.8 million to $107 million.

New York, meanwhile, will withhold 8.82% in taxes, which would reduce the winner's haul by $17.5 million to $107.3 million. And winners could face additional local taxes if they live in New York City (about 3.88%) and Yonkers (1.32%), according to lottery site

In other words, both winners can expect to pay north of 45% in taxes.

They also will have a harder time protecting their privacy — neither state allows winners to claim their prize anonymously.

Author: USA Really