By: April Carson
The winner of the California State Lottery's Powerball jackpot prize of $632.6 million was Orlando Zavola Lozano, who correctly chose the winning numbers.
In January, he bought a $2 ticket from a 7-Eleven in Sacramento that turned out to be a winner. However, the actual amount he received was only $316.3 million, which was lower than expected. This was because he had to share the jackpot prize with another couple from Wisconsin who also had the winning ticket, and he also had to pay taxes on his winnings.
Orlando chose to receive a lump sum of $225.1 million before taxes, instead of opting for annual payments over several years, which would have resulted in a higher overall amount. This is a common choice for lottery winners.
According to Fox 40, the reason for the higher tax amount when receiving lottery winnings in a lump sum is because of the choice made by the recipient. This choice does not affect the amount of money that goes towards supporting public education in California from lottery purchases. Alva V. Johnson, Director of the California State Lottery, stated that “The $1.35 billion prize is still the same and a portion of every dollar spent on the lottery goes to support public education in California.”
Lottery taxes are collected by the state and used to help fund education in California, regardless of how the winner chooses to receive their winnings.
If they end up selling a winning ticket, they’ll earn significant commissions and bonuses.
Johnson stated that whether a player wins a large or small prize or does not win at all, it is still beneficial for both the community and California as a whole.
The state of California's public schools will receive $67.8 million as the winning prize. Additionally, the 7-Eleven store where Orlando bought the ticket will receive a $1 million bonus for selling the prize-winning ticket.
This is yet another example of why playing the lottery can be beneficial to not only players but also communities. It provides a way for states to generate much-needed revenue and resources that help fund education programs.
The Powerball jackpot that Orlando has won is the seventh-largest prize in the history of Powerball. It is important to note that the odds of winning the Powerball jackpot remain the same, regardless of how large the jackpot gets. The odds are one in 292,201,338.
Of course, with the large prize comes huge responsibility for Orlando. Although he has only taken home half of the total amount, there are still many financial decisions to be made to ensure a secure and comfortable future.
Many lottery winners often receive a smaller amount than what they originally won.
Edwin Castro, a lottery player in California, won a $2.04 billion jackpot but received only $628 million.
In 2022, he won the biggest Powerball prize ever, but according to a tax expert cited in Forbes, the actual winnings were lower due to 24 percent of the jackpot being taken by the IRS.
The cash portion of the prize is equivalent to approximately 50% of the total prize amount, meaning that the overall prize money of $2.04 billion would be reduced to $997.6 million.
After taking out the 24 percent to send to the IRS, the total amount left is $758.2 million. Additionally, following tax bracket regulations, Castro will owe another 13 percent when filing taxes this month. As a result, the final amount will be around $628.5 million.
It’s a far cry from the $1.35 billion that was initially publicized for the Mega Millions winner, but still an impressive amount nonetheless. It just goes to show how much of an impact taxes can have on large financial gains.
If you win Powerball in California, you don't have to pay taxes on your winnings. However, if this tax exemption did not exist, your earnings would have been reduced even further. It’s a good thing to keep in mind if you ever find yourself with the lucky ticket. "Taxes are an important factor to consider when looking at large winnings," said financial advisor Laura Johnson. "It’s best to plan so you can be aware of how much of your prize money will make it into your pocket."
Regardless, this remains one of the largest jackpots in U.S. lottery history - and a reminder that there can be some serious consequences for large financial gains. Even with taxes, the winner of this Mega Millions will still have been able to walk away with a huge sum of money.
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April Carson is the daughter of Billy Carson. She received her bachelor's degree in Social Sciences from Jacksonville University, where she was also on the Women's Basketball team. She now has a successful clothing company that specializes in organic baby clothes and other items. Take a look at their most popular fall fashions on bossbabymav.com
To read more of April's blogs, check out her website! She publishes new blogs on a daily basis, including the most helpful mommy advice and baby care tips! Follow on IG @bossbabymav
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