Powerball jackpot tax facts, winner woes - KMSP-TV

Powerball jackpot tax facts, winner woes

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If you are one of the many who didn't win the $550 million Powerball jackpot on Wednesday night, you're not alone -- and FOX 9's Tom Lyden explains why that should be of some comfort.

First of all, the winner won't really be getting $550 million anyway. Assuming there aren't multiple winners, a big chunk of that change will go to taxes. If the winner takes the cash option -- which should be done for a variety of tax reasons, they'll get $360 million -- but after Uncle Sam's cut and state taxes, it's really going to be $244 million.

That's still a nice chunk of change, but if history is any guide, winning the lottery may simply mean trading in your current troubles for a whole new set of problems.

Minnesota's own cautionary tale is Victoria Zell. She won an $11 million Powerball jackpot a decade ago only to end up killing a friend while driving on meth.

Jack Whitaker, of West Virginia, won the largest jackpot ever -- and he says it's the worst thing that ever happened to him. He squandered his money and lost his granddaughter to a drug overdose.

In Florida, winner Abraham Shakespeare was murdered over his winnings and was found dead under a concrete slab.

Want to feel even better about not winning? A study of lottery winners conducted in the 70s found that they were no happier than non-lottery winners. In fact, their joy in the simple pleasures of life -- like a walk in the park, the sound of a child laughing, or company of a pet -- was roughly on a par with people who had suddenly become paraplegics in accidents.

Yet, the printing tickets still spur the imagination. Accountant Todd Koch buys just one ticket because the odds don't get better with more, but his tax advice could save the winner a fortune.

  1. Take the cash option and do it this year
  2. The winner's taxes will likely go up in 2013, so prepare
  3. Set up a foundation to get a charitable write-off

Yet, his best advice is to figure out what your values are and what you want to pass on to your children and family -- and learn how to say no to your friends.

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