If you’re buying a lottery ticket on the off chance that you might win the $1.9 billion Powerball jackpot tonight, you’d do well to remember this: Winning isn’t all Dom Pérignon and luxury suites. You’ll also face a hefty tax bill — so much so that you might have to scrape by on $585 million or less once the IRS takes its cut.
You have a 1 in 292.2 million chance of winning the jackpot, per Axios, which are long odds indeed.
One thing’s for certain: No matter who wins, they’ll be giving a huge chunk of their winnings to Uncle Sam. That’s the case whether the jackpot is doled out as an annuity or as a cash lump sum. Most winners opt for the cash option.
For the current $1.9 billion jackpot, the cash option is $929.1 million, NBC Dallas-Fort Worth noted. There is a mandatory 24% federal tax withholding on that amount, which would reduce the winnings significantly — these winnings would be further reduced by the top federal marginal tax rate of 37%.
Unless the winner does something creative with the jackpot, such as donating part of it to charity, there would therefor be an additional 13% due to the IRS to match the top federal marginal tax rate: a total of $343.7 million in overall taxes. That would bring the winnings down to about $585 million — and that’s before any state or local taxes might apply.
If the winner is lucky enough to live in a state with no state income tax, this won’t be a problem. Only seven states have no state income tax, according to Intuit TurboTax: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming.
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This article originally appeared on GOBankingRates.com: Here’s How Much in Taxes You’ll Pay if You Win the $1.9 Billion Powerball Jackpot (and Other Fun Facts)