The Mega Millions jackpot increases to 9 million – that’s how much the winner can take home after taxes
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The Mega Millions jackpot increases to $579 million – that’s how much the winner can take home after taxes

Posted on by Amelia Pressman

Topline

The Mega Millions jackpot rose to $579 million – the fifth-biggest prize of the year – after no ticket matched all six numbers drawn on Tuesday night, although the winner would take home a much smaller payout after taxes.

Important facts

If a winner emerges in the next drawing, they can choose between receiving the $579 million jackpot spread over 30 annual payouts or a flat cash prize of $276.6 million – the most popular choice.

If this option is chosen, the lump sum decreases to $210.2 million after a mandatory 24% federal tax withholding is applied.

The winner could then face a federal marginal tax rate of up to 37% depending on their taxable income, further reducing their winnings to $174.26 Million.

If the winner chooses to pay in installments, their annual payments would drop from about $19.3 million to $12.16 million when the federal marginal interest rate of 37% is applied.

The winner may also have to pay additional taxes from their state of residence as some states such as New York tax lottery winnings at 10.9% while others such as Texas, Florida and California do not.

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What you should pay attention to

The next Mega Millions jackpot drawing will take place on Friday evening.

Big number

1 in 302.6 million. These are the extremely bad odds that a ticket buyer must overcome to win the Mega Millions jackpot. That’s even worse than the Powerball jackpot’s already astronomical odds of 1 in 292.2 million.

Important background

In September, a single ticket holder from Texas won an $800 million Mega Millions jackpot, the second-largest Mega Millions prize of the year so far. The biggest Mega Millions prize of the year was won in March by a single ticket holder in New Jersey, who won a jackpot of $1.13 billion. However, the biggest lottery prize of the year came in April, when a single ticket sold in Oregon won a $1.3 billion Powerball jackpot. The winner was ultimately identified as Cheng “Charlie” Saephan, a Portland resident undergoing chemotherapy for cancer. Saephan said he shared the prize with his girlfriend Laiza Chao as the two pooled money to buy the lottery tickets.

Further reading

Mega Millions ticket holder in Texas wins $800 million jackpot – that’s how much he’ll take home after taxes (Forbes)

Billion-dollar mega million jackpot cracked in New Jersey – this is what the winner will take home after taxes (Forbes)

The $1.3 billion Powerball jackpot winner is a cancer patient looking forward to finding a ‘good doctor’ (Forbes)

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