Topline
The Powerball jackpot rose to $925 million—the fourth largest in the game’s history—after no tickets matched all six numbers drawn on Wednesday night, although the eventual winner will end up with a far smaller payout after their tax bill.
Key Facts
If a winner emerges in the next draw, they will have a choice between a $925 million payout spread over 30 annual installments or a lump sum amount of $432.4 million—often the more popular choice.
The lump sum payment will drop to $328.62 million after a mandatory federal tax withholding of 24%.
Depending on the winner’s final taxable income, they could face a federal marginal rate as high as 37%, further dropping their winnings to $272.41 million.
Under the installment route, the winner’s annual payments of around $30.83 million could drop as low as $19.42 million, if the 37% federal marginal rate is applied.
Depending on the winner’s state of residence, their winnings could face further taxes as some states like New York levy a 10.9% tax on lottery winnings, while others like Texas, Florida, and California don’t tax them at all.
Surprising Fact
To win the massive Powerball jackpot a ticket holder will have to overcome terrible odds of 1-in-292.2 million. The Mega Millions jackpot has an even more abysmal 1-in-302.6 million odds.
What To Watch For
The next drawing for the Powerball jackpot will take place on Saturday night.
Big Number
$2.04 billion. That is the value of the largest lottery jackpot in U.S. history, won in November last year by a Powerball ticket holder from California.
Key Background
Last month, a single ticket sold in Florida won the $1.6 billion Mega Millions jackpot—the largest prize in that game’s history and the largest lottery prize of the year so far. On Wednesday, officials confirmed the winner came forward and claimed their prize on Monday. The identity of the winner, however, was not revealed as Florida law allows them to remain anonymous for up to 90 days after claiming the prize.
Further Reading
Powerball Jackpot Hits $835 Million—Here’s How Much The Winner Will Take Home After Taxes (Forbes)
Read the full article here