(NEXSTAR) – It’s hard not to imagine what you’d do if you won the Powerball or Mega Millions jackpot, especially when either reaches record levels like they have recently. 

But, if you’re lucky enough to win, you won’t exactly be lucky enough to take home the full jackpot. 

There are a couple of reasons why, the first being the payout options. 

In both Powerball and Mega Millions, you can opt for either an annuity option — where you receive an initial payment followed by 29 annual payments that grow by 5% each year — or a cash payment. 

While the second option is the most common, it is also typically smaller than the annuity option in the end. For example, the record-setting Powerball jackpot won last year was advertised as $2.04 billion, but the winner received only $997.6 million

Regardless of the payout you choose though, winners also see their prizes decrease thanks to taxes. 

If you win over $5,000 from a Powerball or Mega Millions jackpot, or any lottery game, state lotteries are required to withhold 24% in federal taxes automatically, according to Intuit. You’ll also likely find yourself in the top federal tax bracket of 37% (remember, these rates are progressive, so you won’t actually lose 37% of the whole payout to federal taxes), and, depending on where you live, you’ll be paying state taxes on your winnings.

Local taxes vary from state to state. Some of the 45 states that sell Powerball and Mega Millions tickets don’t withhold their own taxes on your winnings while most others will. 

If you’re hoping to dodge automatic tax withholdings on your lottery prize (with the exception of the federally required 24%), these are the best states to win in: 

Where a state tax is withheld, the amount is taken automatically. Think of it like your paycheck — federal and state taxes are taken out before you receive the check, and depending on how much you paid, you might owe some or gain some back at the end of the year, the North Carolina Education Lottery explains.

New York has the highest lottery tax rate at 10.9%. If you live in New York City, you’ll face an additional 3.876% withholding, according to the state lottery

These five states have the highest state tax withholdings on large lottery prizes (some have different tax rates for different-sized prizes, or the taxes aren’t withheld unless a prize is larger than a set value): 

  1. New York: 10.8%
  2. Maryland: 8.95%
  3. New Jersey: 8%
  4. Oregon: 8%
  5. Wisconsin: 7.65%

The District of Columbia also imposes an 8.5% tax on lottery prizes won in its jurisdiction.

Of the states that do withhold local taxes, four have rates below 4%: North Dakota (2.9%), Mississippi (3%), Pennsylvania (3.07%), and Indiana (3.15%).

Here’s a look at the tax withholding states will, generally, impose on large Powerball or Mega Million jackpots: 

You’ll notice five states — Alaska, Alabama, Hawaii, Utah, and Nevada — are gray on the map. These states do not currently participate in Powerball or Mega Millions (here’s why).

Financial experts recommend that if you do win a large lottery prize, put together a team before you collect your prize. That should include an attorney, a tax advisor, and a financial advisor, Robert Pagliarini, author of “The Sudden Wealth Solution,” told Nexstar.

And when it is finally time to claim your money, make sure to evaluate the two options you have: the annuity payout or lump sum. The decision is ultimately a personal one, and what might be ideal for one could be disastrous for another.

While the lump sum is more popular and would grant immediate access to the cash, it also means more taxes.

“You’d be taxed up to 37% federally, and then even more so depending on your state tax,” Steven Evensen, CFP, a financial advisor with Gerber Kawasaki Wealth and Investment Management told Nexstar. “So I would speak to an accountant about that to make sure you aren’t kind of overspending in your head before you actually receive the money and receive your tax bill at the end of the day.”

Jeremy Tanner contributed to this report.