The Mega Millions jackpot jumped to $940 million Friday. Here’s what to expect for the tax bill if you win.
The Mega Millions jackpot has ballooned to an estimated $940 million ahead of Friday’s high-stakes drawing at 11:00 p.m. ET.
If you pick the magic six numbers, there are two payout options: a lump sum of $472.5 million or 30 years of annuitized payments worth $940 million. Both choices are pretax estimates.
However, both windfalls shrink considerably after the IRS takes its cut — and the lucky winner could also trigger a state tax bill.
However, the lump sum may be better because you can maximize the prize by investing the proceeds sooner, according to certified financial planner and enrolled agent John Loyd, owner at The Wealth Planner in Fort Worth, Texas.
Either way, you’ll need to „have a plan and realize you can run out of money,“ he said. Working with a team of experts, including a financial advisor, lawyer and accountant, may eliminate some of the pressure when it comes to decisions about future gifts or donations.
