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Here’s how much 2021 winners of Mega Millions and Powerball have forked over in taxes

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In terms of the lottery, it has been a great yr thus far for Uncle Sam.

Winners of Powerball and Mega Tens of millions jackpots — value an marketed $2.9 billion in all — have collectively paid roughly $515 million to the IRS in 2021 taxes. And that will not be the top of it.

Whether or not jackpot winners go together with the instant, decreased money possibility (most do) or an annuity stretched throughout three a long time, 24% is withheld for federal taxes. But as a result of the highest price of 37% is utilized to earnings above $523,600 (single tax filers) and $628,300 (married {couples} submitting collectively), extra finally ends up being owed.

To this point in 2021, there have been 5 Powerball jackpot winners — and the tempo of these wins might decide up, as a result of a third weekly drawing will be added on Mondays beginning Aug. 23.

Mega Tens of millions, in the meantime, has had 4 winners this yr (its $55 million jackpot gained on June 8 stays unclaimed, nonetheless). For all collected prizes, winners have chosen the money possibility as a substitute of the annuity.

For the three claimed Mega Tens of millions jackpots — which have ranged from $96 million to $1 billion — winners’ money choices had been value a mixed $1.2 billion. The 24% federal tax withholding has totaled $288 million, decreasing the collective take to $912 million.

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Powerball winners’ money choices have totaled $945.7 million, with jackpot quantities starting from $23.2 million to $731.1 million. After the 24% federal withholding of $227 million, winners had been left with $718.7 million.

For illustration functions: If winners had been unable to scale back their taxable earnings in any respect, one other 13% — the distinction between the 24% withheld and the highest tax price of 37% — could be because of Uncle Sam. Collectively, that might be one other $278.9 million or so going to federal coffers ($793.9 million altogether).

In fact, these lottery wins typically contribute only a drip within the federal tax bucket. Earnings taxes paid by people are anticipated to comprise about $1.9 trillion (50%) of the federal government’s estimated $3.8 trillion in income for fiscal yr 2021.

Native coffers additionally profit from massive lottery wins, as properly. Relying on the place the ticket was bought, state taxes starting from zero to greater than 8% additionally could be utilized.

Just like the federal withholding price on jackpot wins, the quantity withheld for state taxes may also be lower than what you may owe.

There are methods to scale back how a lot of your winnings get taxed, though not many. For 2021, due to a temporary change in federal rules, the charitably inclined can decrease their taxable earnings by making a certified money donation value as much as 100% of their adjusted gross earnings (that restrict is scheduled to revert again to 60% in 2022).

Some lottery winners arrange their very own charitable basis or comparable possibility, resembling a donor-advised fund, and donate a portion of their windfall to it.

The Mega Tens of millions jackpot is $179 million ($129.5 million money possibility) for Tuesday night time’s drawing. Powerball’s jackpot is $211 million (money possibility of $153.9 million), with the following drawing set for Wednesday night time.

Your likelihood of profitable Powerball is about 1 in 292 million. For Mega Tens of millions, it is 1 in 302 million.



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