SerpApi.Org
Winner takes…some.
The Mega Millions jackpot has reached a historic high of $743 million after Tuesday night’s six-number draw failed to produce a match.
Tuesday’s numbers were 25, 37, 59, 68, 70, and the gold Mega Ball was 10.
Despite the impressive jackpot amount, if a winner matches the numbers in the next draw, slated for Friday, their take-home payout, after taxes and deductions, will be considerably less.
The hypothetical winner will choose between having the $743 million disbursed over 30 annual installments or a lump-sum payment of $323.4 million.
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Historically, winners have chosen to take the lump-sum payment, which, in this case, will drop to around $245.8 million after mandatory 24% federal withholding is applied.
The cuts keep on cutting: depending on the winner’s overall taxable income, the prize money could be subject to a federal marginal rate as high as 37%, reducing the prize payout to roughly $203.7 million.
If the same federal marginal tax rate is applied to the installment plan, the winner’s annual payouts of around $24.8 million would be reduced to $15.6 million.
While less popular, spreading the winnings over a 30-year annuity is considered a tax-management strategy. While each annual payment may still fall into the top bracket for large jackpots, it allows more time for tax planning each year.
Depending on where the winner lives, they could face additional deductions, as many states tax lottery winnings.
State lottery taxes range from 1.95% in North Dakota to 10.9% in New York, the highest in the nation.
Meanwhile, folks in Alaska, Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming pay zero state tax on their winnings.
If the fates smile upon you and you end up with a six-pack of lucky numbers, experts recommend immediately signing the back of your ticket, keeping it secure, and forming a team that includes an attorney, a tax advisor, and a financial advisor to help you navigate your newfound wealth.
Earlier this year, Mega Millions completed its first year operating under the largest restructuring in the game’s history.
The revamp, marketed as “bigger and better,” was designed to offer larger prizes for all non-jackpot-tier winners, better odds of winning the jackpot, and a larger starting jackpot of $50 million, up from the original $20 million.
The odds of hitting a jackpot in the newly revamped game are 1 in 290,472,336.
In January, a Georgia lottery player claimed the historic $983 million Mega Millions jackpot, which is the largest in the state’s history.
The player, who remained anonymous but lives in Georgia, stepped forward on Jan. 2 and chose the $453.6 million cash option before taxes, according to lottery officials.
