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The next Mega Millions winner will have to wait three decades to become a billionaire, even though tonight’s jackpot is $1.1 billion, the fourth time since October 2018 that the winnings have exceeded $1 billion.
Winners can choose to take the full amount in annual payments over 29 years or a smaller lump sum immediately in cash.
Financial advice: What do you do if you win?
A sole winner, however, won’t take home any money without paying substantial taxes on it first. Winnings are reported to federal and state tax agencies, and tax rates are based on taxable income.How much tax on a $1.1 billion lottery win?
A single winner could take the total $1.1 billion in 30 payments over 29 years or go for the one-time cash option – in this case, $568.7 million – which is what most winners choose.
Regardless of which option the player takes, the IRS enforces a minimum 24% federal withholding tax on lottery winnings. That takes a big chunk out of whatever option a player takes. If the total $1.1 billion payout was chosen:
Federal taxes: $264 million
Take-home: $836 million (by 2051)
If the cash option of $568.
