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The Powerball jackpot is sitting at a tantalizing $1.73 billion, but don't feel too bad if you don't win. Whoever does isn't taking all that home.PHOENIX — This is one of the biggest Powerball jackpots in history. $1.73 billion for whoever is lucky enough to win. But even if you do draw that lucky ticket, you won't be bringing that much money home with you.
Firstly, that $1.73 billion is for winners who take the annuity option: a series of 30 yearly payouts. Despite this being a bigger payout overall, most winners opt to take home the cash prize.But that's still not the amount you'll be leaving with if you win. Even if it's decided by random chance, the federal government considers the lottery to be income, and taxes it appropriately.
Right off the bat, 24% of the prize is held for federal income tax. The prize also puts the winner in the highest federal tax bracket, where income is taxed at 37%, meaning the winner will have to give another 13% of their prize when they file their taxes.Assuming the winner chooses the cash option, as a majority do, what do they get? Not $1.73 billion, but still a hefty payout of $457,780,045. That's a big reason why financial experts warn lottery winners to take it slow.
“So by far, the biggest misconception that we hear or read and see is, is that the money seems to be infinite when it certainly is not,” wealth advisor Shean Fletcherearlier this year, adding that winners should meet with financial advisers, lawyers and certified public accountants to make a plan.Before You Leave, Check This Out
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