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Rockwellwuzright on scored.co
1 year ago3 points(+0/-0/+3Score on mirror)
>How much will the Mega Millions winner actually get?
>When a grand prize winner comes forward, they must first decide whether they want to receive their winnings in a 30-year annuity, or receive their winnings in a lump sum of cash. If they pick the annuity, they will eventually receive the entire advertised jackpot over the span of three decades.
>Most jackpot winners go with the lump sum, which means they get the “cash value” of that jackpot. For Tuesday's Mega Millions $1.13 billion jackpot, the cash value was $537.5 million.
>Right away, 24% of that cash value is withheld for federal taxes and goes to the IRS, TurboTax explains.
>So if the New Jersey Mega Millions winner does select the cash option, $129 million of Tuesday's estimated prize would be withheld, dropping it to $408.5 million.
>But even then, the winner is not off the hook quite yet.
>Because the federal government counts lottery winnings as income, getting such a large jackpot would likely move the winner into a higher tax bracket, one in which their income is taxed at 37%. So when the winner next files their taxes, they’ll likely have to give the IRS another 13% of that prize.
>When a grand prize winner comes forward, they must first decide whether they want to receive their winnings in a 30-year annuity, or receive their winnings in a lump sum of cash. If they pick the annuity, they will eventually receive the entire advertised jackpot over the span of three decades.
>Most jackpot winners go with the lump sum, which means they get the “cash value” of that jackpot. For Tuesday's Mega Millions $1.13 billion jackpot, the cash value was $537.5 million.
>Right away, 24% of that cash value is withheld for federal taxes and goes to the IRS, TurboTax explains.
>So if the New Jersey Mega Millions winner does select the cash option, $129 million of Tuesday's estimated prize would be withheld, dropping it to $408.5 million.
>But even then, the winner is not off the hook quite yet.
>Because the federal government counts lottery winnings as income, getting such a large jackpot would likely move the winner into a higher tax bracket, one in which their income is taxed at 37%. So when the winner next files their taxes, they’ll likely have to give the IRS another 13% of that prize.