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$1.6B Powerball Jackpot Sets World Record

The Powerball jackpot in the US is setting an all-time world record, reaching $1.6 billion, the largest ever won by any lottery or chance. No one has been lucky enough to guess all six numbers in the past twenty-nine Powerball drawings. The amount may increase further if there is no winner in tomorrow’s drawing. The odds of a single ticket hitting the jackpot are about 1 in 292 million. The top prize has grown through three weekly drawings since August when a ticket in Pennsylvania matched all six numbers drawn to create a $206.9 million jackpot.

Powerball Jackpot Sets World Record

According to the Multistate Lottery Association, which runs the Powerball, the annuity option is larger than the cash option, due to higher interest rates that make it possible for the game to fund larger annual prizes. The cash option, however, is driven by ticket sales.

Astronomical amounts are driving Americans into a frenzy. Even so, residents of five states — Hawaii and Alaska — can only watch the lottery from afar or travel miles to buy tickets from other states.

Chances of someone being struck by lighting are less

The odds of winning the Powerball jackpot are one in 292.2 million. In comparison, the chance of someone being struck by lightning is low, about one in a million.

The winner can choose whether to receive the entire amount in one lump sum payment or annual installments over the next twenty-nine years. If the winner wants a lump sum payment, he will get only 782.4 million. Whatever the winner chooses, however, a large portion of the money will go to taxes.

How Much Will a Powerball Jackpot Winner Pay in Taxes?

Assuming the winner chooses the cash option, the twenty-four percent federal tax withholding would reduce the $782.4 million by $187.8 million. Still, more will be owed to the Internal Revenue Service (IRS) at tax time. The top federal income tax rate is thirty-seven percent, and, this year, applies to income over $539,900 for individual tax filers and $647,850 for married couples. Next year, the top rate will be imposed on income above $578,125 (individuals) and $693,750 (married couples). That means unless the winner can reduce taxable income by making charitable donations, another $101.7 million will be due to the IRS. That would translate to a total of $289.5 million in federal coffers, giving the winner $492.9 million.

Depending on where the ticket was purchased, state taxes may also be due. While some jurisdictions have no income tax—or don’t tax lottery winnings—others impose tax rates higher than ten percent.

People can buy a ticket for two dollars. They are sold in forty-five states, the District of Columbia, Puerto Rico, and the US Virgin Islands. Drawing takes place at 10:59 p.m. ET ticket sales cut-offs vary by jurisdiction but are usually one to two hours before the drawing.

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