Saturday, April 10

Mega Hundreds of thousands jackpot leaps to $600 million. Here’s the tax bill

Mega Hundreds of thousands jackpot leaps to $600 million. Here’s the tax bill

Drew Angerer | Getty Photos Information | Getty Pictures

No, you failed to hit the $520 million Mega Tens of millions jackpot.

The lottery game’s top prize has climbed to a whopping $600 million for Tuesday night’s drawing, pursuing no ticket matching all six numbers drawn Friday night time. The sum marks the 8th-greatest jackpot in lottery background. And Powerball’s jackpot, meanwhile, is an estimated $470 million for Saturday night’s drawing.

Of training course, the advertised quantities are not what winners would close up with. Lottery officials are demanded to withhold 24% of huge wins for federal taxes. And that is only the start off of what you would spend to Uncle Sam and, normally, point out coffers.

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For the $600 million Mega Millions jackpot, the income possibility — which most winners select as an alternative of an annuity — is $442.4 million. The 24% withholding would shave about $106.2 million off ahead of the prize reaches you.

Even so, you could count on owing a lot more to the IRS.

The top marginal money tax fee is 37%. If there have been no reductions to the winner’s taxable income — these kinds of as substantial charitable contributions — another 13%, or $57.5 million, would be due to the IRS at tax time (which would be April 2022 for jackpots claimed in 2021).

That would be $163.7 million, in all, likely to the IRS. 

Point out taxes would be on best of that. Dependent on exactly where you stay, that hit could be extra than 8%.

In the meantime, for Powerball’s $470 million jackpot, the money solution is $362.7 million. If there is certainly a winner, the 24% federal withholding would shave $87 million off the top. Another 13% would be $47.2 million, for a whole of $134.2 million for the taxman.

Despite handing over a sizable volume to federal and point out coffers, the immediately after-tax total would be everyday living shifting. Authorities say jackpot winners should assemble a group of seasoned experts — which includes an attorney, a tax advisor and a economical advisor — to support navigate their sudden wealth.

Most players would not have to worry about it, however. The possibility of hitting the Mega Tens of millions jackpot with a solitary ticket is miniscule: 1 in 302 million. For Powerball, the odds are a little bit greater: 1 in 292 million.

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