The Mega Millions prize jumps to $ 432 million. What to do if you win

The mega million prize has gone up.

After no tickets match the six numbers drawn on Friday, the maximum prize is now $ 432 million for the next draw on Tuesday night. The maximum Powerball prize pool is $ 384 million for Saturday night’s draw.

While the chance of a single ticket matching all six numbers in either game is tiny: 1 in 302 million for Mega Millions and 1 in 292 million for Powerball, it’s still worth considering how you would handle it. this advantage if you exceed the odds.

The amount after taxes would change lives. Experts say the big lottery winners should bring together a team of experienced professionals (a lawyer, a tax advisor and a financial advisor) to help navigate unexpectedly.

Here are some things winners should keep in mind before going to the lottery headquarters to claim their prize.

The general advice is to tell as few people as possible. Because of the fondness of scammers and strangers to track lottery winners, it’s best to keep the exciting news close.

You may be able to protect your identity from the public, depending on your status.

Just a handful allows the winners to remain completely anonymous. In others, you may be able to claim the award through a trust or limited liability corporation, or LLC, that does not have your name, although you may need to plan for it.

“If possible, you should never take the money on your behalf,” said Kurt Panouses, founder of Panouses Law Group in Indialantic, Florida, and an expert in helping lottery winners.

You can choose between receiving your win as a lump sum or as an annuity spread over three decades. Either way, the money will be imposed when you receive it.

Right now, federal income taxes are historically low, and it’s impossible to know where they might be in a few years. This means that, from a tax perspective, it could cost you more to collect your living income, as tax rates go down as they go down, experts say.

“So the question is whether you want to pay all that income tax this year, or take out the money over many years without knowing where we might have income taxes in ten or fifteen years,” Panouses said. .

Before you reach perfection, 24% of federal taxes will be withheld. However, as the upper marginal rate is 37%, you can count on more duty at the time of the tax, which would be in April 2022 for the premiums claimed in 2021.

For the $ 432 million Mega Millions award, the overall amount option is $ 329.7 million. The 24% withholding would mean $ 79.1 million for Uncle Sam, which would leave you with $ 250.6 million.

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Assuming you don’t have any reduction in your taxable income (such as large charitable contributions), another 13%, or about $ 42.8 million, would be due at the time of the taxes. That would total $ 121.9 million to the IRS.

For the $ 384 million Powerball raffle Saturday night, the cash option is $ 295.4 million. The 24% federal withholding would reduce that expense by $ 70.9 million, with another 13%, or $ 38.4 million, to be paid at the time of the tax. In total, that would mean $ 109.3 million for federal coffers.

And then there are state taxes. They range from zero to over 8%, depending on where the ticket was purchased and where the winner lives. In other words, you could end up paying more than 45% in taxes.