(Bloomberg) — Friday night time’s drawing for the Mega Thousands and thousands 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 must appropriately choose 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 possibilities of taking dwelling the highest prize should not: the percentages of profitable are 1 in 303 million. You’re extra more likely to be eaten by a shark, in response to sports-betting web site Bookies.com.
Laying declare to the Mega Thousands and thousands jackpot gained’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 fee 5% greater than the earlier one. Each choices are topic to taxes, after all.
The $1.1 billion jackpot payout can be taxed as odd earnings, in response to Tom O’Saben, a director on the Nationwide Affiliation of Tax Professionals. A single winner would most actually hit the utmost federal tax charge of 37%, bringing down the prize to about $408 million.
The take-home prize cash will depend upon the place you reside, because the earnings are topic to the winner’s state and native tax charge. Mega Thousands and thousands tickets — which price $2 every — are bought in 45 states plus the District of Columbia and the U.S. Virgin Islands.
If you tack on state and native taxes, which might vary as excessive as 13% or above in jurisdictions like California, O’Saben mentioned the jackpot winner might quit about half their winnings, taking dwelling only a third of the $1 billion jackpot.
“The Mega Thousands and thousands winner is not going to be a billionaire. However even after taxes, it should make you a millionaire,” mentioned 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 contemplate their very own longevity and future tax charges when deciding between accepting a lump-sum money prize or the annuity prize choice.
“The way you settle for fee is dependent upon the wishes of the winner,” he mentioned. “Sit down with an legal professional and monetary advisor as a result of there are each tax and non-tax components to think about.”
To contact the writer of this story:
Paulina Cachero in New York at [email protected]