Taxes: Gov Shaves 1.28 Billion Jackpot Down To $433 Million

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The winner of the Mega Millions jackpot bought their ticket in Illinois, and like most others, they took the lump sum. 

Because the winner is taking their earnings all at once, rather than receive $1.28 billion, they receive $742.2 million… or at least they were supposed to. 

Instead, the winner will take home only $433.7 million, just over one-third of the original jackpot thanks to taxes. The government can’t resist, they need their cut on almost all transactions. 

First, the IRS will take a 24% ($179,328,000) withholding tax on that $742 million, then, according to Forbes another $97,136,000 will be shaved off due to the winner’s new tax bracket. 

All together a whopping $276,464,000 will be taxed from the massive lump sum. The remainder is $470,736,000. This figure does not even account for the possible state taxes that could also apply to the winnings. 

The Mega Millions first rightfully takes their cut due to the winner’s choice to get his/her money all at once. From there the jackpot is passed down through all levels of government until their pockets are filled. 

Because the ticket was purchased in Illinois, it’s safe to assume that this is where the winner lives. Illinois has a 4.95% tax rate which would shave off another $37 million, leaving $433.7 million for the lucky gambler