(Bloomberg) — Friday evening’s drawing for the Mega Tens of millions jackpot has swelled to an astounding $1.1 billion, which might be the second highest prize within the lottery’s historical past, bested solely by a profitable ticket for $1.54 billion in 2018.
The fortunate jackpot winner should appropriately decide six numbers — 5 white balls from 1 to 70 and the yellow “mega ball” from 1 to 25. Whereas the principles of play are simple sufficient, the probabilities of taking residence the highest prize are usually not: the chances of profitable are 1 in 303 million. You’re extra more likely to be eaten by a shark, in keeping with sports-betting web site Bookies.com.
Laying declare to the Mega Tens of millions jackpot received’t make the winner an in a single day billionaire.
Winners have two choices: They’ll declare their jackpot as a lump sum instantly, which slashes their prize to $648.2 million. Or they will obtain the complete quantity in annual funds unfold out over the course of 30 years, with every cost 5% greater than the earlier one. Each choices are topic to taxes, after all.
The $1.1 billion jackpot payout will likely be taxed as odd revenue, in keeping with Tom O’Saben, a director on the Nationwide Affiliation of Tax Professionals. A single winner would most definitely hit the utmost federal tax price of 37%, bringing down the prize to about $408 million.
The take-home prize cash will rely on the place you reside, because the earnings are topic to the winner’s state and native tax price. Mega Tens of millions tickets — which price $2 every — are offered in 45 states plus the District of Columbia and the U.S. Virgin Islands.
While you tack on state and native taxes, which might vary as excessive as 13% or above in jurisdictions like California, O’Saben stated the jackpot winner may hand over about half their winnings, taking residence only a third of the $1 billion jackpot.
“The Mega Tens of millions winner is not going to be a billionaire. However even after taxes, it’ll make you a millionaire,” stated O’Saben.
For anybody who experiences a monetary windfall from the lottery, O’Saben advises searching for out authorized and monetary recommendation earlier than they obtain the cash. Winners ought to rigorously take into account their very own longevity and future tax charges when deciding between accepting a lump-sum money prize or the annuity prize possibility.
“The way you settle for cost relies on the wishes of the winner,” he stated. “Sit down with an legal professional and monetary advisor as a result of there are each tax and non-tax elements to contemplate.”
To contact the creator of this story:
Paulina Cachero in New York at [email protected]