The Mega Thousands and thousands jackpot has climbed to $1.15 billion forward of Friday’s drawing, making it the fifth-largest prize within the sport’s historical past.
However how a lot you’d really take residence might be lower than half that, relying each in your alternative of payout and the way a lot you’d owe in federal and state taxes.
Everybody owes federal taxes on lottery winnings. Whereas an automated 24% is withheld upfront, you’d nearly actually owe a complete of 37% when submitting your 2024 tax return, as profitable a billion {dollars} would put you in the top tax bracket.
State taxes on lottery winnings within the U.S. typically vary from 3% to six%, with New York imposing the best price at 10.9%. Nonetheless, eight states do not tax lottery winnings in any respect:
- California
- Florida
- New Hampshire
- South Dakota
- Tennessee
- Texas
- Washington
- Wyoming
If you happen to reside in any of those states, you’ll take residence the utmost payout. That works out to $325,184,812 as a money lump sum, or a 30-year annuity totaling $725,754,360, according to usamega.com.
Whereas the money payout is far lower than the annuity, winners normally take the lump sum since they get extra money immediately.
In contrast with the taxes you may pay within the state of New York, that is a distinction of $125,349,990 for the annuity and $56,254,900 for the money lump sum.
The place you purchase the ticket additionally issues, as a profitable ticket bought out of state might be topic to that state’s taxes. Typically, your private home state would require you to report out-of-state winnings however will normally give you a credit or deduction for taxes paid to the opposite state.
State lottery tax legal guidelines differ, so in case you win a lottery prize in a state aside from your personal, seek the advice of a tax skilled. They’ll additionally show you how to decide the very best payout choice primarily based in your monetary targets.
The following Mega Thousands and thousands drawing is Friday, December 27, 2024, at 11 p.m. ET.
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