Mega Millions Jackpot Climbs to $1.55 Billion Ahead of Tuesday Drawing.

Mega Millions Jackpot Climbs to $1.55 Billion Ahead of Tuesday Drawing

Lottery players are snaring some of the biggest jackpots in history. One example is the $1.537 billion prize won in October 2018. If a sole winner chooses the annuity option, they would receive payments spread out over 30 years. But most winners prefer the lump sum payout, which for Tuesday night’s jackpot is an estimated $757.2 million. A big slice of that money would go toward federal taxes, and many states also tax lottery winnings.

The odds of winning the jackpot

While winning the jackpot is a dream come true for anyone, it comes with some hefty tax bills. Winners are required to pay federal and state taxes on their prize money, as well as local and county taxes. The total tax bill could run to 24% of the prize amount. However, lottery players can increase their odds by buying more tickets. However, this does not improve their chances much, as the changes in odds are negligible. To win the jackpot, a player must match all six numbers in a drawing. This means that they must choose five white balls numbered 1 to 70 and a separate gold Mega Ball, which is numbered 1 to 25. There are a total of 292 million possible number combinations. There has been no winning ticket since April 18, and the prize has grown steadily over 31 drawings, edging closer to the record $2.04 billion Powerball jackpot won by a California player in 2022.

Taxes on jackpot winnings

The next Mega Millions drawing is scheduled for Tuesday night at 11 p.m. EDT, and the jackpot is climbing toward record levels. But whoever wins the prize will have to pay Uncle Sam a sizable chunk of their winnings. The first cut comes from the mandatory 24% federal withholding that will be deducted from any prize over $5,000. That cuts the prize by almost $127 million. And then there are state taxes, which vary widely from place to place. For example, California doesn’t tax lottery winnings but New York levies a 10.9% final tax on all prizes. Lottery winners can choose to receive their prize in a lump sum or as an annuity, which is paid out over 30 years. The advertised amount for Friday’s drawing is based on the annuity option, but most winners opt to take the cash payout. In either case, the winner will get a W-2G form to prove that they paid the required taxes.

Prizes for other winners

The Mega Millions jackpot has surpassed the $1.05 billion mark and is expected to rise even higher for Tuesday’s drawing. The lottery game has had some of the biggest jackpot prizes in history, including a $1.537 billion prize won by two players in October 2018. The odds of winning are slim at 1 in 302.6 million, but there are many smaller prizes to be won. Ticket sales are booming as people try to make the dream of hitting the jackpot a reality. The top prize in Mega Millions is paid out either as an annuity over 30 years or a lump sum. Annuity payments are subject to federal income taxes, and many states levy their own income tax on lottery winnings. The winner may also choose to take the prize in cash, which is paid out immediately. Some states, such as New Hampshire and Wyoming, do not levy income taxes on lottery winnings. This helps to encourage more tickets sales and a bigger jackpot.

Rules

If you win the Mega Millions jackpot, the IRS will take a big chunk of your winnings. But you can lower your tax bill by claiming the prize in one lump sum, rather than splitting it over 30 years. This option is the best for most winners. Mega Millions is played in 45 states and the District of Columbia, plus the U.S. Virgin Islands. Tickets cost $2 per play and offer nine ways to win prizes ranging from the jackpot to smaller second-tier prizes. You can choose five numbers from one to 70 and a separate Mega Ball number from one to 25. Tickets can be purchased online, by phone or at lottery retailers. There were also Megaplier winners in Michigan and Tennessee, who won $1 million apiece by matching five numbers without the extra number.  

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