LAS VEGAS (KLAS) — The Powerball jackpot jumped to $815 million for Wednesday’s drawing, but that money comes with a big tax bill should one be lucky enough to win.
While daydreaming about all the ways one could spend the money, you’re not the only winner. The federal and state governments will take a big slice, around 37 percent, of the prize money for taxes, leaving the winner with an estimated cash value of $367.9 million. Some states, like California, don’t withhold state taxes on the winnings, but most states do. Neighboring Arizona withholds 4.8 percent.
The jackpot is now the seventh largest ever for Powerball, and it’s creating some jackpot fever. Although Las Vegas doesn’t participate in a lottery, valley residents often purchase them across the borders of California and Arizona.
If anyone wins Powerball, there are two choices on how to receive the payout.
- They can receive an annuity, which would be paid in 30 graduated payments that grow yearly over 29 years.
- They can take a cash payout. This is the option most winners choose, but it means paying more taxes.
To win a lottery, you have to be one of the luckiest people ever because it all boils down to one thing — the odds — which happen to be 1 in 292 million. In fact, you are far more likely to die in a plane crash (1 in 1.11 million), get killed by a shark (1 in 3.7 million), or drown in a bathtub (1 out of 109,000).
You have to be really, really lucky to win Powerball
The odds improve astronomically, 1 in 24.87, when it comes to winning any Powerball prize. A single ticket costs $2, and prizes start at $4…