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Mega Millions Jackpot Reaches Mind-Blowing $910 Million; What’s Next if You Win?

Mega Millions Jackpot Reaches Mind-Blowing $910 Million; What's Next if You Win? (Photo: Madison Blogspot)
Mega Millions Jackpot Reaches Mind-Blowing $910 Million; What's Next if You Win? (Photo: Madison Blogspot)

The Mega Millions jackpot has reached an astounding estimated amount of $910 million, captivating the attention and dreams of countless hopefuls.

Winning such a staggering amount in the Mega Millions jackpot is undoubtedly a life-changing event, but it comes with significant financial responsibilities. (Photo: Review-Journal)

Winning such a staggering amount in the Mega Millions jackpot is undoubtedly a life-changing event, but it comes with significant financial responsibilities. (Photo: Review-Journal)

Mega Millions Jackpot Reaches $910 Million

According to CNBC, with no Mega Millions jackpot winner declared in the last drawing, the anticipation is building as the next high-stakes drawing approaches on Friday at 11:00 p.m. ET.

Reaching such a substantial prize is rare, with the Mega Millions jackpot surpassing the $1 billion mark only four times before, the most recent instance occurring in January, according to the Mega Millions records.

However, while the excitement of winning such a massive fortune is undeniable, the reality of taxation quickly sets in. Winning such a staggering amount in the Mega Millions jackpot is undoubtedly a life-changing event, but it comes with significant financial responsibilities.

Proper financial planning and seeking professional advice can help winners navigate the complexities of taxation and ensure that their newfound wealth is managed wisely.

As the excitement builds for the next drawing of the Mega Millions jackpot, it’s crucial to remember that while dreams may come true, so do tax bills.

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What Happens Next if You Win Mega Millions Jackpot?

For those fortunate enough to match the winning six numbers of the Mega Millions jackpot, there are two payment options available: a lump sum payout of $464.2 million or a 30-year annuitized payment plan, totaling $910 million.

It’s essential to note that both choices are pretax estimates.

Financial experts suggest that opting for the lump sum payout may be the wiser choice, as it allows winners to invest their proceeds immediately, potentially maximizing their prize over time.

John Loyd, a certified financial planner and enrolled agent from The Wealth Planner in Fort Worth, Texas, emphasizes the importance of having a well-thought-out financial plan in place and acknowledges the need to consider future gifts or donations.

However, regardless of the payment method chosen, winners must be prepared to face the substantial tax implications that come with such an enormous windfall.

Before winners can collect a single dollar of the Mega Millions jackpot, a mandatory 24% federal withholding is imposed. This means that over $111.4 million is immediately sent to the IRS.

Unfortunately, the 24% federal withholding is not enough to cover the entirety of the tax bill.

Winning such a substantial prize places the recipient into the top federal income tax bracket, which currently stands at 37%. Therefore, a significant portion of the prize will be subject to the 37% tax rate, resulting in an additional tax bill.

For the tax year 2023, the 37% rate applies to taxable income exceeding $578,126 for single filers and $693,751 for couples filing jointly. The calculation of taxable income involves subtracting the greater of the standard or itemized deductions from the adjusted gross income. For example, single lottery winners would owe $174,238.25, plus 37% of any amount over $578,125.

Married couples filing jointly would owe $186,601.50, plus 37% of any amount exceeding $693,750.

Considering the 24% federal withholding, it does cover a substantial portion of the taxes owed, but the final tax bill could still amount to millions more, depending on the winner’s tax mitigation strategies and other financial circumstances.

Additionally, state taxes can also play a role in reducing the overall price. Depending on the winner’s residence and where the ticket was purchased, some states impose taxes on lottery winnings, with some levying over 10% in the top tax bracket.

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