How does the lotto work?

Question

i see stuff on tv about a guy winning 250 million and thats crazy. i think i might want to do it. do they tax it? how do you get paid? monthly? weekly? they cant give you all that at once can they?

thanks for being patient with me, i never really got into the lotto until now

Answer 1

OK so when there is a big jackpot like that, there are two options for getting the money.  The first option is to get a one time payment.  This means that you get all of the money but it is less than the second option.  The second option is to get an annuity.  This means that you get n dollars a month over a set period.  This way you get more money, but over a longer period.  All of this is taxed.

Answer 2

Guessing you are in the US? I'm from Canada and not an expert on US lotto, but I believe when they advertise a jackpot of say $250 mil, if someone were to win they have a couple options. You can take a one time payout, but it is a reduced amount. It is taxed, likely just the same as income. I think you could also take a payment over a number of years, and it would total a higher amount. Again, all that I cannot confirm, maybe someone else can shed a bit more light on it.

In Canada its different. Our jackpots don't get nearly as high, anything over $20 mil is getting up there (highest ever was about $54 mil), but it is a 1 time payout, and it is not taxed.