The Mega Millions jackpot keeps climbing. It’s been three months since anyone hit the jackpot, and now the payout is a staggering $830 million. It’s the fourth highest payout in history. That is, it’s the fourth largest lottery payout in history. It’s the third largest jackpot in the history of the game.
But if you pick up that winning number on your way home this evening, you’re obviously not taking in $830 million. You can choose the annuity payments; that’s 30 payments over 29 years. Or you can choose the lump sum. In either case, the taxes are going to get you. They always do.
So just how much will you pay in taxes on the prize?
Most winners take the lump sum. If you win the $830 million and take the lump sum, you’ll walk away with $487.9 million. There’s also a mandatory 24% federal tax withholding that will reduce that by about $117.1 million.
The top federal marginal tax rate is 37%. That applies to income above $539,000 as a single taxpayer or $647,850 as a married couple, and it could mean you’ll owe more on April 15.
If you win tonight’s jackpot, a great way to reduce what you’ll owe Uncle Sam is to donate to charity. You can contribute up to 60% of your adjusted gross income to a charity and get a tax deduction from the contribution.
The last time that a Mega Millions jackpot reached numbers near this was back in January. A lucky California resident took home a $421 million prize after buying a ticket at a Los Angeles area gas station. The number has only been higher than this payout three times.
Mega Millions Sits at Fourth Highest Payout Ever
The current payout on a winning Mega Millions ticket is the fourth highest payout in lottery history.
In January of 2021, a winner in Michigan grabbed a $1 billion payout. In October of 2018, someone walked away with $1.5 billion in South Carolina. And in January of 2016, three winning numbers were sold in California, Florida and Tennessee. The split jackpot was worth $1.6 billion.
The next drawing for the current payout is on Tuesday evening at 11 p.m. ET. There’s another drawing on Friday at the same time. Your odds of winning are decidedly not good. The odds of winning the Mega Millions jackpot are about one in 302.5 million. There are certainly better investments if you’re looking for a return. But it’s a two dollar ticket, right? Live a little. Mega Millions tickets are available in 45 states, Washington, D.C. and the U.S. Virgin Islands. It can’t hurt to drive down to the local convenience store and take a shot. Or if you live in Alabama, cross a state line.