The lottery is a type of gambling where you buy tickets for chances to win money or prizes. It’s a popular form of entertainment and has been around for centuries.
Lotteries are a fun way to win big cash, and you can do them online or at a local store. But there are also some risks involved, so it’s important to know your options.
If you’re a winner, take advantage of the 60-day waiting period before you can claim your prize, says Jennifer Glasgow, an advisor with the CNBC Make It financial blog. You should also avoid making sudden lifestyle changes, such as quitting your job or trading up for a luxury car, she says.
During that time, consider your options before you share your winnings with family or friends. Especially if you’re planning to gift your winnings away, you should be aware of the taxes you might have to pay, Glasgow tells CNBC Make It.
You’ll also want to be sure to use a safe, secure location to keep your winnings when they arrive, she adds. A good place to keep your money is in a high-quality savings account.
When you play the lottery, don’t forget to sign your ticket and make sure your ID is on it. You’ll also need to show it to a lottery official before you can claim your prize.
In addition, don’t leave your tickets unattended at any point, says Carolyn Hapeman, a spokeswoman for The New York Lottery. If you do, the lottery could decide that your ticket is invalid and your prize won’t be paid out.
A lot of people don’t realize that a lottery ticket is actually a bearer instrument, meaning that you have to sign it and present it with your ID to claim your prize. This means that it’s easy to lose your prize if you forget to do either of those things, so be sure to sign your ticket and give it to an authorized agent.
If you’re going to try your hand at the lottery, it’s best to play online. That way, you can avoid the risks and hassles of traditional paper tickets.
Another option for playing the lottery is pull-tabs, which are similar to scratch-offs. They involve matching the numbers on the back of the ticket to one of the winning combinations on the front. This is a quick, inexpensive way to win, and you can usually find them at many grocery stores and convenience stores.
You should also keep in mind that most U.S. lotteries deduct 24 percent from your prize to cover federal taxes. After that, you’ll probably have to pay state and local taxes as well.
A lot of lottery winners spend their winnings on luxuries, such as vacations or cars, but they should remember that it’s important to pay attention to the tax consequences. If you don’t, you could end up paying more in taxes than your prize when it comes time to file your return.
