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Of course, the advertised amount is just what you would get if you decided to take your earnings as an annuity spread over three decades. The lump sum cash option – which most winners choose – for this jackpot is $403.8 million, as of noon Tuesday.
However you decide to receive your windfall, taxes will reduce some of it.
$96.9 million in taxes would be removed from the cash option
Assuming you’re like most winners and choose the cash option, a mandatory 24% federal withholding tax would reduce the $403.8 million from $96.9 million. That would reduce your take to $306.9 million.
However, you might expect to owe the IRS more at tax time. The top federal tax rate is 37% and applies to income over $578,125 for single filers and $693,750 for married couples filing jointly.
This means that unless you can reduce your taxable income, such as by making large tax-deductible charitable contributions, you still owe 13%, or about $52.5 million, at tax time. This would bring your winnings down to $254.4 million.
There may also be state or local taxes depending on where the ticket was purchased and where you live. These levies range from zero to more than 10%.
Most Mega Millions players, however, won’t have to worry about paying millions to the IRS or state coffers: the odds of a single ticket matching all six numbers hitting the jackpot are about 1 in 302.6 million.
Meanwhile, the Powerball jackpot is $291 million (with a cash option of $147.9 million) for Wednesday night’s draw. The chance of hitting the mother lode in this game is slightly better: 1 in 292 million.