How Much Will I Have to Pay in Taxes If I Win the Lottery Jackpot?

lottery jackpot

The chance of winning a lottery jackpot depends on several factors, including the design of the game, how many winning numbers are drawn, and whether the drawn numbers are returned for another drawing. In addition, most lotteries award smaller prizes for matching some of the winning numbers, even though this reduces the chances of winning the jackpot. Although these prizes may not significantly increase the chances of winning the jackpot, they increase the amount of money that can be won and raise public interest in the lottery.

The Powerball lottery has the largest jackpot of any US lottery game. In August 2018, the prize for this game totaled $1.586 billion. Three winners from California, Florida, and Tennessee shared the prize. After realizing he won the jackpot, Schultz immediately contacted financial advisers and attorneys to help him handle the money. This is important for someone who has no experience with money, or who does not know what to do with it.

If you win the lottery, there is a good chance you’ll owe taxes on the entire amount. While the IRS generally withholds only 24% of lottery winnings, you should consider how much you will pay depending on how you choose to receive your winnings. In addition to federal taxes, you’ll also owe state income taxes. For example, if you win the lottery in Illinois, you’ll owe taxes on that amount of money at 4.95%. If you win in another state, the amount will be higher than the Illinois state income tax rate.