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No, you did not hit the $520 million Mega Tens of millions jackpot.
The lottery recreation’s high prize has climbed to a whopping $600 million for Tuesday evening’s drawing, following no ticket matching all six numbers drawn Friday evening. The quantity marks the Eighth-largest jackpot in lottery historical past. And Powerball’s jackpot, in the meantime, is an estimated $470 million for Saturday evening’s drawing.
After all, the marketed quantities usually are not what winners would find yourself with. Lottery officers are required to withhold 24% of massive wins for federal taxes. And that is solely the beginning of what you’ll pay to Uncle Sam and, sometimes, state coffers.
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For the $600 million Mega Tens of millions jackpot, the money possibility — which most winners select as a substitute of an annuity — is $442.4 million. The 24% withholding would shave about $106.2 million off earlier than the prize reaches you.
Nonetheless, you possibly can depend on owing extra to the IRS.
The highest marginal revenue tax fee is 37%. If there have been no reductions to the winner’s taxable revenue — corresponding to giant charitable contributions — one other 13%, or $57.5 million, can be because of the IRS at tax time (which might be April 2022 for jackpots claimed in 2021).
That might be $163.7 million, in all, going to the IRS.
State taxes can be on high of that. Relying on the place you reside, that hit could possibly be greater than 8%.
In the meantime, for Powerball’s $470 million jackpot, the money possibility is $362.7 million. If there is a winner, the 24% federal withholding would shave $87 million off the highest. One other 13% can be $47.2 million, for a complete of $134.2 million for the taxman.
Regardless of handing over a large quantity to federal and state coffers, the after-tax quantity can be life altering. Specialists say jackpot winners ought to assemble a crew of skilled professionals — together with an lawyer, a tax advisor and a monetary advisor — to assist navigate their sudden wealth.
Most gamers will not have to fret about it, nevertheless. The possibility of hitting the Mega Tens of millions jackpot with a single ticket is miniscule: 1 in 302 million. For Powerball, the chances are barely higher: 1 in 292 million.