Powerball After Taxes: How Much Would the $600 Million Winner Take Home?

Who will be the extra lucky winner of the $600 million Powerball Jackpot? The odds of winning the jackpot are 1 in 292.2 million (slightly better than the odds of winning the Mega Millions with 1 in 302.6 million).

Once the winner gets picked, they'll have a decision to make—claim the $600 million in 30 annual annuity payments or take a one-time, lump-sum cash payment of approximately $293.4 million.

First, it's important to understand that federal income tax rates range from 10% to 37%. Thus, the amount of your lottery winnings will determine whether the federal tax on those winnings will be on the lower end or significantly higher.

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If we focus on large lottery prizes (like Saturday’s $600 million Powerball jackpot), you can see how easily the highest federal tax rate comes into play. For the 2024 tax year, the top federal tax rate (37%) kicks in if your taxable income exceeds $609,350 and you’re single.

If you’re married and file a joint tax return, then the top tax rate applies to taxable income over $731,200. As a result, lottery prizes above the applicable threshold amount will be taxed at the top federal tax rate.

For lotto winnings over $5,000, 24% will be automatically deducted and sent to the IRS for tax withholding. This deduction is an advance on your annual federal tax return, not an extra charge.

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