Everyone's dreams of becoming a billionaire were ended when one Downtown Los Angeles resident was revealed to be the winner of the epic $1.08 billion this week.

Powerball Jackpot Hits $1 Billion After 3 Months Without A Winner
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The winning numbers were 7, 10, 11, 13 and 24, with a Powerball of 24. If the winner takes the lump sum, they could go home with over $500 million! But that wasn't the only winner, three prize tickets also matched five numbers plus the Power Play for $2 million prizes, one each in Florida, Pennsylvania and Rhode Island! So there was enough wealth to go around.

Now you might be thinking that out of the billion dollars in the lottery, $500 million seems like a decent amount to walk away with; and had you won that much in Texas, you could also walk away with a decent amount!

That's because Texas is one of the best states to win the lottery- mainly because of the tax withholding. Texas does not withhold their own taxes on your winnings while most other states will. Legally, the only tax withholding is the federally required 24%. According to the Texas Lottery:

For U.S. citizens, the Federal Government requires the Texas Lottery Commission to report the following lottery winnings to the IRS:
$600 or more in winnings when the payout is at least 300 times the amount of the per board wager,
The winnings are subject to federal income tax withholding (winnings greater than $5,000.00).
The tax withholding rate is 24% for lottery winnings, less the wager, for prizes greater than $5,000.

Other states where it's best to win the lottery with less tax withholding include:

  • California
  • Delaware
  • Florida
  • New Hampshire
  • South Dakota
  • Tennessee
  • Washington
  • Wyoming

And the worst states, with a high tax withholding include:

  • New York: 10.8%
  • Maryland: 8.95%
  • New Jersey: 8%
  • Oregon: 8%
  • Wisconsin: 7.65%

So, if you want to win a nice lump sum and you're in the Lone Star state, you're good to go!

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