SAN JOSE, CA. – Powerball fever has gripped the country and the Bay Area. Due to several weeks of failures, Wednesday’s jackpot draw stands at $1.2 billion.
A steady stream of would-be billionaires came and went all day at Ernie’s Liquors in East San Jose. But one person in particular hoped a local would beat the odds and win big.
Trish Garcia is busy getting Martha’s Kitchen, a longtime South Bay nonprofit, ready for the Thanksgiving rush. In three weeks, staff members will prepare and distribute a thousand meals to the less fortunate. But on this day, Garcia’s attention is divided – between what is and what could be the association’s good fortune.
“Of course, we all think about it and we talk about the lottery, gambling and things like that. That kind of money could not only change one person’s life, but the lives of many people,” he said. she declared.
The Powerball jackpot had players praying for the odds to fall in their favor, as they recited their deepest desires.
“Go crazy,” said one man. “Pay off the house. Buy a new car. Donate to charity,” another said. A third said: “Oh sure I will try to donate some to all the local charities. Some special needs in the Vietnamese temple. And of course schooling. I believe in the future for the children. And of course, save some for the family.”
San Jose State tax expert Caroline Chen has four things for anyone who becomes super rich overnight.
“You could use these donations to maybe reduce your taxable income,” Chen said.
She advised taking a lump sum payment of around $600 million and then paying taxes. California does not tax lottery winnings, but the federal government will.
“But of course those millions of dollars will put you in the highest tax bracket. And depending on whether you’re married or single, it’ll be around 37%,” Chen said.
With taxes having further reduced the gain by half, to about $380 million, Chen’s list beyond charitable donations includes investing money. Experts said the stock market has historically increased wealth. Or, in something less volatile, like real estate, which always seems to bounce back.
“If you could pay anything for a property in cash? That might be your best bet,” Chen said.
Then Chen advised to keep some of the winnings.
“What you want is enough capital to make money, so you can live off of it,” she said.
It’s a simple formula that everyday people and those who work for non-profit organizations hoped would lead to good fortune and lots of charitable giving.
“Hopefully it’s a local person, and that they’re going to support local charities and nonprofits…that would be fantastic,” Garcia said.
Experts have said that the odds of winning decrease when there is a huge jackpot, as many more people buy tickets and enter the pool of potential winners.
Jesse Gary is a reporter based in the station’s South Bay bureau. Follow him on Twitter @JesseKTVU and Instagram @jessegontv