Uncle Sam would shave tens of millions of dollars off the windfall before it even reaches the winner.
div > div.group > p:first-child"> With no one hitting all six winning numbers in Powerball's Wednesday night drawing, the top prize has climbed to $625 million, making it the seventh-biggest jackpot in U.S. lottery history.
Whether the winner takes their prize as an annuity spread out over three decades or as an immediate reduced lump sum, lottery officials are required to withhold 24 percent for federal taxes. "The big impact on winnings is taxes," said certified financial planner Dan Routh, a wealth advisor at Exencial Wealth Advisors in Oklahoma City."If you win, just realize how big the tax bill can be and make sure you're ready to handle it."
For Saturday night's drawing, the cash option — which most winners go with — is $380.6 million. The 24 percent federal withholding would reduce that amount by $91.3 million.
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