Nobody won Monday’s Powerball drawing, meaning the jackpot is now worth $750 million. But if you win, how much of that will you actually get to take home?
The numbers look large and inviting when you first look at it, but after all taxing agencies take their piece of your pie, the slice left for you is better than nothing, but nothing like what you might have expected.
The short answer: just a fraction of it. First of all, if you took the lump sum instead of annual payments – which nearly every winner does – you’d end up with $378.8 million, says John Chichester Jr., CEO of Chichester Financial Group. Then there’s a mandatory 24 percent federal withholding tax, lowering your winnings to about $90.9 million, he says. But that’s not all. “That 24 percent comes off the top, but you’re still responsible for another 13 percent at some point,” Chichester says.
The good news is you probably won’t have to deal with paying taxes on the Powerball jackpot. The odds of winning it are about one in 292 million.