Powerball Jackpot Hits $1 Billion — But Only If You Pick the Less-Popular Prize Option. If You Win, Here's the Tax Bill

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Powerball Jackpot Hits $1 Billion — But Only If You Pick the Less-Popular Prize Option. If You Win, Here's the Tax Bill
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Yeah, yeah, someone else will probably win-- again. But if it's any consolation, here's how much they'll have to pay in taxes.

Assuming you were like most winners and chose the cash option, a 24% federal tax withholding would reduce the $497.3 million by $119.4 million.

Yet more would likely be due to the IRS at tax time. The top federal income tax rate is 37% and this year applies to income above $539,900 for individual tax filers and $647,850 for married couples.This means that unless you were able to reduce your taxable income by, say,, another 13% — or about $64.7 million — would be due to the IRS. That would translate into $184.1 million going to federal coffers in all, leaving you with $313.2 million.

State taxes could also be due, depending on where the ticket was purchased and where you live. While some jurisdictions have no income tax — or do not tax lottery winnings — others impose a top tax rate of more than 10%.And, of course, you probably won't need to worry about how much the jackpot really would deliver — the chance of a single ticket matching all six numbers drawn in Powerball is about 1 in 292 million.

Meanwhile, Mega Millions' jackpot is $87 million for Tuesday night's drawing. The chance of your ticket hitting the jackpot in that game is roughly 1 in 302 million.

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