Jackpot winners decide between taking an immediate lump sum or distributing winnings over three decades. In either case, the IRS will take 24% before the money reaches you.
For the $ 548 million Mega Millions jackpot, the cash option is $ 309 million. For the $ 314 million Powerball, it's $ 179.4 million.
24% federal withholding tax would reduce Mega Millions cash option of approximately $ 74.2 million, $ 234.8 million and Powerball of $ 43.1 million, to $ 136.3 million . You should also anticipate that you owe more to Uncle Sam at the time of tax.
In addition, you will pay state taxes on money unless you live where lottery winnings are not taxed. For states that take a piece, the rate ranges from a maximum of 8.82% in New York to a minimum of 2.9% in North Dakota, according to the USAMega.com lottery site.