How much money, if you win the Mega Millions jackpot, will you receive after taxes?

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TSI NEWS

An annuity, in which the prize is paid out over a 30-year period, or taking it as a lump sum are both options available to jackpot winners in Mega Millions and other lotteries. 

Lottery officials claim that the majority of winners choose the lump sum, or "cash option," as Mega Millions refers to the payoff.

That sum would be $250.4 million for the upcoming Mega Millions prize of $465 million. Although it's a huge sum of money, it's not exactly what you would keep after winning.

The federal government and all but a few state governments will be clamouring for a share of your reward right away.

For income over $500,000, the top federal tax rate is 37%

But the payments continue after that. The remaining tax, or the difference between 24% and 37%, will be due when filing your taxes the following year.

Let's assume that if you win the Mega Millions jackpot, you choose to choose the cash option.

The cash alternative is $250.4 million if the jackpot stays at $465 million for the following drawing.

From that cash choice, the federal government will deduct $60,096 right away (24%)

Remember that you still owe $32,552,000 in federal taxes, which are due the following year.

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