Something the Lottery does not mention much, if you win the lottery; expect Uncle to withhold a sizable amount of tax from your jackpot just too wet its beak. The current federal income tax withholding rate is 24%.  Then there is the state.  Illinois will want their portion as well.

If the jackpot is large you may also be put into a higher bracket as well. If you are going to be in the 37% bracket the jackpot pushes your taxable income over the $500,000 mark or $600,000 for joint filers. So be ready for the big tax hit.

Or plan a strategy to limit the tax burden.  Create a NFP a Family Trust, donate a large portion of the proceeds and reduce the tax burden.  Then let your philanthropy work for you.

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