Massive Powerball Jackpot Reaches $565 Million- Detailed Breakdown of Potential Winnings
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A Powerball jackpot of $565 million is up for grabs, making it the biggest lottery prize of the year so far. But, how much of this massive sum would the winner actually take home after taxes?
If the winner chooses the one-time lump sum payout, the prize would be approximately $254 million to $283 million before taxes. After a mandatory federal withholding of 24%, around $60 million to $68 million would be withheld immediately. However, due to the top federal tax rate of 37%, the winner may owe additional federal taxes upon filing, further reducing the net amount.
So, after federal taxes, the winner might keep roughly $160 million to $180 million of the lump sum. State taxes could further reduce this amount, depending on the winner's state of residence. Some states, like Texas, Florida, and California, do not tax lottery winnings, while others, such as New York, tax winnings at up to 10.9%.
For example, with a $700 million jackpot claiming a lump sum around $316 million, the winner would pay $117 million in federal taxes total (including withheld and owed), leaving about $199 million after federal taxes but before state taxes[1][3]. Applying similar proportions to $565 million gives the approximate net figures above.
In the event that the winner opts for the installment route and faces a 37% federal marginal rate, their annual payments would be approximately $11.8 million.
It's worth noting that the odds of winning the Powerball jackpot are 1 in 292.2 million, while the odds of winning the Mega Millions jackpot are 1 in 290.4 million[4][5]. The Mega Millions draw for a $198 million jackpot will happen a day before the Powerball draw.
For those interested in a more detailed analysis, Forbes has an article discussing how much the Powerball winner could take home after taxes[2].
References:
- Powerball Winner's Tax Bill: How Much Will They Really Take Home?
- Powerball Winner's Tax Bill: How Much Will They Really Take Home?
- Powerball Jackpot Soars to $565 Million, Becoming 2022's Biggest Prize
- Powerball Odds
- Mega Millions Odds
In the realm of personal-finance, the winner of the Powerball lottery, should they claim the one-time lump sum payout for the current jackpot of $565 million, might keep $160 million to $180 million after federal taxes, leaving state taxes and potential additional obligations to consider. Alternatively, if the winner opts for the installment route, their annual payments could amount to approximately $11.8 million.
