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Here is the tax invoice for the profitable $1.128B Mega Tens of millions ticket

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There may be formally one winner for the $1.128 billion Mega Millions jackpot — and the taxman will take a large share, specialists say.

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A single ticket bought in New Jersey gained the sport’s fifth-largest grand prize after matching all six numbers drawn Tuesday evening, Mega Tens of millions announced Wednesday. The ultimate jackpot dropped from an estimated $1.13 billion to $1.128 billion based mostly on precise ticket gross sales.

The fortunate winner will select between two options: an annuitized prize price $1.128 billion or a lump-sum payout of $536.6 million money.

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Whatever the payout possibility, “you are dropping virtually half of it” to taxes, stated Albert Campo, a licensed public accountant and president of AJC Accounting Providers in Manalapan, New Jersey.

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New Jersey taxes prizes over $10,000 and the winner will owe hundreds of thousands to the state, together with a compulsory withholding, on high of their federal tax invoice, he stated.

Eight states, together with California, Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming, do not levy income taxes on lottery winnings.

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How a lot the winner may owe in taxes

In fact, these are tough calculations. The winner’s federal tax invoice may also depend upon different revenue, credit or deductions.

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As for state taxes, New Jersey robotically withholds 8% for payouts of greater than $500,000, which can value the winner about one other $43 million up entrance. The state withholding covers “a giant chunk,” however New Jersey’s high tax bracket is 10.75%, Campo stated.

“None of those winners actually take into consideration taxes” till there is a hefty share going to the IRS and state authorities, stated Andrew Stoltmann, a Chicago-based lawyer who has represented a number of lottery winners.

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The Mega Tens of millions isn’t the one strategy to win large. The Powerball jackpot has reached an estimated $865 million with out a large winner from Monday evening’s drawing. The possibilities of scoring the grand prize for that recreation are roughly 1 in 292 million.

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