The Mega Millions jackpot jumps to $ 432 million. What to do if you win

The Mega Millions jackpot has grown even more.

After no tickets matched all six numbers drawn on Friday, the grand prize is now $ 432 million for the next draw on Tuesday night. The Powerball jackpot is $ 384 million for Saturday night’s draw.

While the chance of a single ticket matching all six numbers in both games is tiny – 1 in 302 million for Mega Millions and 1 in 292 million for Powerball – it’s still worth thinking about how you’d deal with such a thing. of heart if you beat the chances.

The amount after tax would change lives. Experts say the big lottery winners should gather a team of experienced professionals – a lawyer, a tax advisor and a financial advisor – to help navigate the crazy.

Here are some things that winners should consider before going to the lottery to claim their prize.

The general advice is to tell as few people as possible. Due to the propensity of scammers and strangers to spot lottery winners, it is better to keep the interesting news close.

You may be able to protect your public identity, depending on your status.

Only one hand allows the winners to remain completely anonymous. In others, you may be able to claim the award through a trusted or limited liability company or LLC that does not have your name – however, you need to plan for this.

“You should never take the money on your own behalf, if possible,” said Kurt Panouses, founder of Panouses Law Group in Indialantic, Florida and an expert in helping lottery winners.

You can choose between receiving your earnings as a lump sum or as a rate spread over three decades. Either way, the money will be taxed when you receive it.

Right now, federal income taxes are historically low – and it’s impossible to know where they might be in years to come. This means that, from a tax perspective, it could cost you more to get an annuity, because tax rates are more likely to rise on the road than fall, experts say.

“So the question is whether you want to pay that income tax this year or take the money over several years, not knowing where we might be depending on the income tax in 10 or 15 years,” Panouses said.

Before the wind reaches you, 24% will be withheld for federal taxes. However, because the maximum marginal rate is 37%, you can count on the higher debt at the time of taxation – which would be April 2022 for the premiums claimed in 2021.

For the $ 432 million Mega Millions jackpot, the lump sum option is $ 329.7 million. The 24% withholding would mean $ 79.1 million for Uncle Sam, leaving you with $ 250.6 million.

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Assuming you had no reduction in your taxable income – such as large charities – another 13%, or about $ 42.8 million, would be due at the time of taxation. That would mean a total of $ 121.9 million for the IRS.

For the $ 384 million Powerball jackpot on Saturday night, the cash option is $ 295.4 million. The federal withholding tax of 24% would reduce this value by $ 70.9 million, by another 13% or $ 38.4 million due at the time of taxation. In total, that would be $ 109.3 million for federal houses.

And then there are state taxes. They range from zero to more than 8%, depending on where the ticket was purchased and where the winner lives. In other words, you could end up paying more than 45% in taxes.