(CNN Spanish) – Jackpot win 800 million dollarsThe second largest company in its history. But do not raise your hopes so quickly: if you can match all the numbers, the prize you will receive will be much less.
Here’s the math: For next Saturday’s drawing, the cash prize—the prize chosen by winners—is $383.7 million. But this figure does not include taxes.
Calculating taxes is not easy and ultimately depends on your own circumstances. The Internal Revenue Service (IRS) considers lottery winnings as income and the balance to contribute to federal treasuries is based on your total annual income.
However, there are some numbers that help get an idea. If you win the jackpot, the prize will be subject to the highest federal tax rate of 37%. This means that if you guessed correctly (the probability of doing so is 1 in 292.2 million) the amount drops to about $142 million up front.
Also, depending on where you live, you should take into account potential state taxes. New York is the state that charges the highest rate for prizes over $5,000: it’s 8.82%. Among the states that will charge you, the state with the lowest rate is North Dakota, which remains at 2.9%.
But there are states that do not levy additional taxes, among them California and Florida. In this case, your only contribution to government funds will be from the IRS.
Of the total upgraded $800 million, you will be left with a maximum of just over $140 million. Much less than that, but more than nearly enough for any desire you have to fulfill.
The odds of winning the jackpot are very low, but this year it happened six times, According to the lottery. If you decide to participate, remember that the drawing takes place on Saturday at 10:59 p.m. Miami time and that you can watch it live on TV or on the website. Powerball.com.
If you win a smaller Powerball prize, do you have to pay taxes?
It depends on the total. The IRS does not apply discounts to prizes up to $600. And there are two different cases then: If your prize goes from that number to $5,000, you must add the winnings on your tax return and the number depends on the final calculation. If the prize is greater than $5,000 USD, discounts ranging from 24% to 37% will apply.
At the state level, there are also differences by amount Which you can check here.