The Mega Thousands and thousands jackpot jumps to $ 600 million. Right here is the tax invoice

Drew Angerer | Getty Images News | Getty Images

No, you did not hit the Mega Millions jackpot of $ 520 million.

The lottery game’s grand prize rose to a whopping $ 600 million for Tuesday night’s drawing after no ticket matched all six numbers drawn on Friday night. The amount marks the eighth largest jackpot in the history of the lottery. Powerball’s jackpot is an estimated $ 470 million for the Saturday night draw.

Of course, the amounts shown are not what the winners would end up with. Lottery officials must withhold 24% of large winnings for federal taxes. And that’s just the beginning of what you would pay Uncle Sam and usually state coffers.

More from Personal Finance:
Some newlyweds face a marriage tax penalty
Here are three of my worst money mistakes
Avoid mistakes in asset allocation in the event of a divorce

For the $ 600 million Mega Millions jackpot, the cash option that most winners choose instead of an annuity is $ 442.4 million. The 24% retention would save approximately $ 106.2 million before the price hits you.

However, you can be rest assured that you owe more to the IRS.

The highest marginal tax rate is 37%. If the winner’s taxable income were not reduced – such as B. large donations for charity – would be another 13% or 57.5 million at the tax time. USD to pay the IRS (this would be April 2022 for jackpots claimed in 2021).

That would be a total of $ 163.7 million that would go to the IRS.

There are also state taxes. Depending on where you live, this hit can be more than 8%.

The cash option for the $ 470 million Powerball jackpot is $ 362.7 million. If there is a winner, the 24% withholding tax would cut $ 87 million off the top. Another 13% would be $ 47.2 million, for the tax officer a total of $ 134.2 million.

Despite handing over a substantial amount to federal and state coffers, the post-tax amount would be life changing. Experts say jackpot winners should assemble a team of seasoned professionals – including a lawyer, tax advisor, and financial advisor – to help manage their sudden fortune.

Most gamers don’t need to worry, however. The chance of hitting the Mega Millions jackpot with a single ticket is tiny: 1 in 302 million. For Powerball, the odds are slightly better: 1 in 292 million.