The Tax on the 1.28 Billion Mega Millions Prize is Mind Blowing
With Mega Millions mania subsiding this week. The one winner in Illinois still has yet to come forward to claim their prize! How much will this winner actually win? The number will actually shock. Keep in mind the advertised jackpot was 1.28 BILLION dollars. The take-home cash value will be about $433 million. What?
Forbes broke down the numbers for us. The 1.28 billion is only if you take it over time. The IRS takes over, Lottery winnings are taxed at a rate of up to 37%. The lump sum drops the winnings to around $747 million before taxes. The cash prize after the IRS gets its 24% has then been whittled down to $567 million. But the winnings then put the claimant in the top 37% bracket, which is another $97 million in taxes. This brings the final payout for this Illinois winner to $433 million. This just blows my mind.That is almost $850 million dollars in taxes right of the top!
If you are patient and took the payments. You would get the full amount of the advertised jackpot of $1.28 billion spread out over a 30-year time period. If the winner chooses annual payments, the annuity is paid out as one immediate payment followed by 29 annual payments. Each payment is 5% bigger than the previous one. The winner has 12 months from draw date to claim their prize. After reading this, will this change your option when play the Lotto? Let us know in the Facebook comments of this story.
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