ONE lucky man has won a huge prize after thinking the lottery machine was broken.
The Michigan winner had to give up more than half of his winnings, however, because of one simple choice.
A Saginaw County man recently experienced the surprise of a lifetime when he discovered he had won $4 million in the Michigan Lottery’s $4,000,000 Ultimate instant game.
The 52-year-old player, who has chosen to remain anonymous, purchased his winning ticket at the Fastlane convenience store, located at 3540 State Street in Saginaw, 35 miles north of Flint.
“I stopped to get gas and bought two $4,000,000 Ultimate tickets while I was in the store,” the player recounted.
“I scratched the barcodes, scanned the first ticket, and got a message to file a claim. I scanned the ticket again, and when that message came up a second time, I thought the scanner was broken.
“I scanned the second ticket and that scanned correctly, so I wasn’t sure what was going on.
“I went out to my car to pump gas and I scratched the ticket while I was waiting. It’s hard to describe the feeling when I saw the winning amount.
“I got in the car and yelled: ‘We just won $4 million!’”
DECISIONS, DECISIONS
The lucky player recently visited Lottery headquarters to claim his prize, per the Michigan Lottery.
He chose to receive the winnings as a one-time lump sum payment of about $2.7 million.
With his newfound fortune, he plans to purchase land and invest.
For prizes over $5,000, the Lottery is obligated to withhold 24% for federal income tax and 4.25% for state income tax, according to the Michigan Lottery.
These withholdings may not fully satisfy your total tax liability.
For prizes of $1,000 or more, the Lottery is mandated by state law to verify with the Department of Treasury whether the winner has any outstanding debts, per the state lottery’s website.
This includes back taxes, child support (Friend of the Court), overdue fees to the Secretary of State, court judgments, or any other debts assigned to the state of Michigan for collection.
If the winner has any such debts, the Lottery must withhold the owed amount from the prize, up to the full amount of the winnings.
Lottery winnings: lump sum or annuity?
Players who win big on lottery tickets typically have a choice to make: lump sum or annuity?
The two payout methods can impact how much money you get from your prize.
Annuities pay out slowly in increments, often over 30 years.
Lump sums pay all at once but in a smaller amount, as taxes are withheld in one go. That means 24% of your prize goes to Uncle Sam right away. Many states tax winnings as well.
Annuities can provide winners time to set up the financial infrastructure required to take in a life-changing amount of money, but lump sums have the benefit of being taxed only once.
Inflation is also worth considering when making a choice, as payouts do not adjust with the value of a dollar. That means that you’ll likely be getting less valuable money towards the end of an annuity.
Each state and game pays out prizes differently, so it’s best to check with your state’s lottery to confirm payment policies. A financial advisor can also help you weigh the pros and cons of each option.
Experts have varying opinions on whether to take the lump sum or take the annuity.
KEEPING ANONYMOUS
Under state law, players who win more than $10,000 in state-only games are granted anonymity., according to the Michigan Lottery.
However, winners have the option to waive this anonymity if they choose.
For multi-state games, state law adheres to the specific rules of those games.
The regulations for multi-state games such as Powerball, Mega Millions, and Lucky For Life permit the public disclosure of winners’ names.
Meanwhile, another lucky winner has yet to claim their lottery winnings after their numbers were drawn several weeks ago.
And someone in South Carolina won $200,000 from a scratch-off lottery ticket, but he almost discarded it before realizing his win.
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