The Powerball jackpot just keeps getting higher. And if there is a winning ticket after this Saturday’s drawing, it will be worth a record-breaking $1.6 billion.
No one came out the victor after Wednesday’s $1.5 billion game, which gave the winnings a chance to surpass the previously standing record jackpot of $1.586 billion that was set in 2016.
And if the drawing doesn’t produce winning numbers this week, the jackpot will make history once again. As of today, there have been 40 rollovers. If it hits 41, it will tie for the longest run in history. The current record was during a 2021 game that left one lucky person with $699.8million.
While the Powerball pot is hefty, there is no saying that one person will grab it all. And even if they do, they’ll have a few options when it comes to cashing in.
Powerball Winners Have to Choices When Claiming the Jackpot
If multiple people win, they will have to split the money evenly. Then, each person gets to decide if they want the money paid out annually over 29 years or if they want a lump sum all at once. Should they choose the former, they will pay fewer taxes. If they decide to go with the latter, they pay a premium.
The one-time cash prize option for a single winner amounts to $782.4 million, which is just under half the annuitized value. Then, the federal government would withhold another $187.8 million for taxes.
And the taxes likely wouldn’t stop there. The top federal income tax rate is currently 37%, and that’s true for single filers who make above $539,900 and married couples who earn a minimum of $647,850. That means that if one person wins it all, they’d have to bring their income down by about 13%, or $101.7 million, through methods such as charitable donations. If not, they’d have to fork over $289.5 million in total taxes. In the end, that $1.6 billion would drop to $492.9 million in the bank.
That jackpot could drop once more if state income taxes apply to the winner. Several states don’t charge any while some impose as much as 10%
On the other hand, someone who chooses an annual payout would get $50 million worth of income each year. Of course, taxes would also come out of that as the person accumulates their fortune.
No matter which way you look at it, however, the amount would be more than most people see in their lifetime. And because it comes after a mere $2 investment, we’d say it’s worth the heavy fees.