Visits: 2
The Powerball jackpot just won’t quit.
The Powerball jackpot, which now marks the fourth-largest U.S. lottery prize ever, has been climbing since late December with twice-weekly drawings yielding no top-prize winner. It’s little wonder — your chance of matching all six numbers is about 1 in 292 million.
For Wednesday night’s drawing, the cash option — which most winners go with — is $465.5 million. The 24 percent federal withholding would reduce that amount by $111.7 million.
Assuming you had no reduction to your taxable income, another 13 percent, or $60.5 million, would be due to the IRS. That’s $172.2 million in all going to Uncle Sam.
After federal taxes, you’d be left with $293.3 million. Then there are state taxes, which range from zero to more than 8 percent depending on where the ticket was purchased and where the winner lives.
In other words, you could end up paying more than 45 percent in taxes.
Given the sheer size of the jackpot, experts say it would be crucial to assemble a team of experienced professionals to help navigate the windfall: an attorney, a tax advisor and a financial advisor.
“There’s a big responsibility that goes with having such a large sum of money,” Routh said. “It would be important to surround yourself with a quality team that’s working in your best interest.”
More from Advisor Insight:
Don’t hide these things from your financial advisor
Target-date funds are getting more personal
These people won’t have their taxes ready by April 15