Mega Millions Jackpot Prize Breaches $1 Billion Mark, But the Tax Bill for Winner Is Insane
The Mega Millions jackpot prize reached the $1 billion mark after no player was able to match the lucky winning numbers on Tuesday night's draw.
According to CNBC, this is the fourth time that the Mega Millions jackpot prize reached $1 billion.
The prize for the said lottery went up from $830 million, per CBS News. The winning lucky numbers during Tuesday night's draw were: 29, 63, 66, 7, 60, and a Mega Ball of 15. No one has gotten the game's six numbers since April 15.
"All jurisdictions have reported in, and no one has hit the Mega Millions jackpot. So, the jackpot will roll to $1,025,000,000 for Friday ($602.5 million cash," lottery spokesperson Marie Kilbane told CNN.
Kilbane added that it takes a long time for the jackpot prize to reach this high, which is why they are excited.
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Mega Millions Tax
The payout for the $1.02 billion Mega Million jackpot prize can be done as an annuity of 30 payments over 29 years. Another option - which is chosen by many winners - is the cash option, which will allow the winner to take the prize of $602.5 million. However, the taxes will not allow winners to take home the entire jackpot prize.
A mandatory 24% federal tax withholding will reduce the jackpot prize by $144.6 million.
With the 37% federal marginal tax, the winner should expect more money deducted from the jackpot prize. The federal marginal tax applies to those who have income above $539,900 as a single taxpayer or $647,850 for married couples who file taxes jointly.
State taxes could also allow more than 10% deducted from the winning prize. If the income is not reduced, another 13% or $78.3 million will also be deducted from the fortune due to the IRS.
There are ways to deduct the taxes imposed once the winner claimed the Mega Millions jackpot prize. American Institutes of CPAs suggests that winners can contribute cash up to 60% of their adjusted income to a charity or a donor-advised fund, prompting a tax deduction for the amount in the year the donation is made. Another way of diminishing taxes is by establishing a foundation and donating income to it. From there, the winner can determine over time how he or she can deploy the money.
Mega Millions Winners
Some Mega Million winners on Tuesday have claimed big prizes, even though the jackpot prize was not claimed.
According to reports, there are eight tickets that won $1 million each after matching the first five numbers.
Another winner from Ohio won $3 million because it included an optional Megaplier purchased for $1 extra.
It can be recalled that the largest Mega Millions jackpot prize was claimed in October 2018 by a winner from South Carolina. During that time, the winner hit $1.537 billion.
Meanwhile, a group of four players in Michigan won $1.05 billion in 2021.
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Written By: Joshua Summers
WATCH: Mega Millions Jackpot Tops $1 Billion After no one Won $830 Million Grand Prize - From CBS News