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2024 begins with lottery jackpot hopes…and tax on the winnings

January 1, 2024

Powerball and money stacks

Is getting rich one of your 2024 New Year resolutions? It could happen tonight if you have the winning Powerball numbers.

The Dec. 30, 2023, drawing didn't produce a winner of the multi-million dollar jackpot. So tonight's Powerball payout for a single winner is $810 million, or the more likely $408.9 million that's available in a single payment.

The possible payout already is the fifth largest Powerball jackpot. And it will grow a bit more today, as wishful millionaires buy tickets up until the numbers are chosen at 10:59 p.m. Eastern Time tonight.

UPDATE, Jan. 2, 2024: The New Year's Day Powerball drawing was life-changing for the person who bought the lone winning ticket in Grand Blanc, Michigan. Congrats to the winner of the $842.4 million jackpot, which has a one-time cash payment value of $425.2 million. And better luck next time for the rest of us!

Lottery taxes, too: If you're playing the national lottery, check out my 6 tax and financial tips for new lottery millionaires (which just happens to be the first tax tip of 2024).

Also, keep in mind that even though federal taxes will be withheld, that 24 percent rate won't be enough to satisfy Uncle Sam. You'll now be in the top 37 percent tax bracket.

Don't forget about your state taxes. Most jurisdictions will collect their slice of your millionaire pie, too.

And if you invest some of your new found riches, the earnings on that money is taxable. You'll need to cover that by paying estimated taxes.

Happy New Year: I know, you didn't plan to start 2024 with tax talk. But in my defense, you chose to click over to the ol' blog on New Year's Day (and I thank you!).

So I'll leave you now to spend the rest of the first day of 2024 tax-talk-free and to enjoy as you wish.

And good luck tonight when the Powerball numbers are picked.

You also might find these items of interest:

 

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The More Tax Posts tab at the top of this page will take you to, well, more tax posts. You also can search below for a tax topic. 

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TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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