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Lottery winner scores $1 million after trying new game but quickly lost $366,000 because of her answer to easy question
Plus why she lost so much cash
A SERENDIPITOUS change in plans led Bonnie Hitchings, a resident of Johannesburg, Michigan to a life-changing win.
She secured a $1 million prize playing the Michigan Lottery’s Cashword Times 20 instant game.
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The unexpected turn of events unfolded when Hitchings visited the Shell gas station at 1025 West Main Street in Gaylord, approximately 168 miles from Flint, according to Michigan Lottery.
Initially intending to purchase her usual Daily 4 tickets and a "Win $100, $200 or $500" ticket, Hitchings found that the latter was sold out.
As a result, she opted for the Cashword Times 20 ticket instead.
"I scratched the barcode and scanned the ticket three times," she said.
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"I kept getting a message to file a claim at the lottery office, so I assumed their scanner was broken and went out to my car to scan it on the Lottery app."
To Hitchings' astonishment, the Lottery app revealed she had won the $1 million top prize, complete with a confetti animation on her screen.
Overwhelmed by excitement, she returned to the store to share the news, sparking a wave of enthusiasm among the staff and customers present.
Hitchings recently visited Lottery headquarters to claim her prize.
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In the previous year alone, instant game players in Michigan won more than $1.7 billion, highlighting the significant appeal and success of these games.
Lottery instant games are widely available at over 10,500 retailers throughout the state, making it convenient for residents to try their luck.
Lottery winner blasts $1million prize as ‘worst thing that ever happened to me’ – he was left with just $97 in account
THOUSANDS TO TAXES
Opting for a one-time lump sum payment, she took home approximately $634,000 after taxes.
For prizes exceeding $5,000, the lottery must withhold 24% for federal income tax and 4.25% of Michigan state income tax.
However, these withholdings might not fully cover your tax obligations.
It is recommended to consult with an accountant, tax attorney, or financial planner to determine your total tax liabilities, according to the Michigan Lottery.
Lottery prizes are considered income, so you will receive a W-2G form for your personal income tax filing.
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.
The prize amount and the tax withholdings are reported to both the Internal Revenue Service (IRS) and the Michigan Department of Treasury, as stated on the state's lotto site.
For prizes of $1,000 or more, state law requires the Lottery to check with the Department of Treasury for any outstanding taxes, child support (Friend of the Court), or fees to the Secretary of State that the winner may owe.
This also includes court judgments or any other debts turned over to the state of Michigan for collection.
If a winner has any outstanding debts, we are required to withhold the debt amount, up to the full prize amount.
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Meanwhile, a Wisconsin man is $1 million richer after beating the odds in a scratch-off game.
And a winner has not yet claimed $100,000 loot after playing the lottery.