$1.9 billion Powerball jackpot is up for grabs. This is the tax invoice

Whoever is the subsequent jackpot winner in Powerball shall be trying on the largest lottery prize ever awarded.

The tax invoice may even be fairly spectacular.

After nobody hit all six numbers drawn Saturday, the Powerball jackpot headed greater. For Monday evening’s drawing, it is now an estimated $1.9 billion if taken as an annuity unfold over three many years and $929.1 million if acquired as an upfront, lump sum of money — that is almost a $1 billion distinction.

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Lately, the annuity possibility is larger than it beforehand was, relative to the money possibility, because of the greater rates of interest which make it attainable for the sport to fund bigger annuitized prizes, in line with the Multi-State Lottery Affiliation, which runs Powerball. The money possibility, nonetheless, is pushed by ticket gross sales.

The highest prize has been rolling greater by thrice-weekly drawings since Aug. 3, when a ticket purchased in Pennsylvania matched all six numbers drawn to land a $206.9 million jackpot. 

So what would that tax invoice be for those who had been to hit the motherlode?

Assuming you had been like most winners and selected the money possibility, a 24% federal tax withholding would cut back the $929.1 million by $223 million.

Nonetheless, extra would seemingly be because of the IRS at tax time. The highest federal revenue tax price is 37% and this 12 months applies to revenue above $539,900 for particular person tax filers and $647,850 for married {couples}. Subsequent 12 months, the highest price is imposed on revenue above $578,125 (people) and $693,750 (married {couples}).

Which means that until you had been in a position to scale back your taxable revenue by, say, making charitable donations, one other 13% — or about $120.8 million — could be because of the IRS. That will translate into $343.8 million going to federal coffers in all, leaving you with a $585.3 million.

State taxes may additionally be due, relying on the place the ticket was bought and the place you reside. Whereas some jurisdictions haven’t any revenue tax — or don’t tax lottery winnings — others impose a high tax price of greater than 10%.

In the meantime, for those who had been to decide on the annuitized quantity, it could be taxed because it’s distributed every year and could be topic to then-current tax charges.

The prospect of a single ticket hitting the Powerball jackpot is about 1 in 292 million.

That is a tad higher than the 1 in 302 million likelihood that comes with Mega Hundreds of thousands, whose high prize is $154 million ($74.7 million money) for Tuesday evening’s drawing.