Philip Sears/ReutersThe record-breaking Powerball lottery draw is now estimated to reach $1.3 billion by the next drawing. And while buying a lottery ticket might not be money-well-spent, some are saying it's now worth buy at least one $2 ticket.
Unfortunately, even the grand-prize winner won't become an actual billionaire. The $1.3 billion sum drops drastically after federal and state taxes are removed.
The real total take-home? According to USA Mega, the winner receives an initial payout of $806 million (if they take the lump-sum). Already we're at 62% of the advertising value.
But now —the tax man visits.
The initial federal tax withheld from the winnings is 25% — removing $201.5 million. Now our winner has $604.5 million left to spend.
But, depending on where they live, an additional state tax of up to 8.82% will be deducted, leaving a grand total of $533,410,800 awarded.
USA Mega makes sure to note that this dollar amount is the estimated total awarded at the time a winner claims the prize — "not your exact final tax burden."
The federal tax actually winds up being 39.5% for lottery winners, and state taxes may vary from the percentages listed on their site. And some residents, like New York City dwellers, are subject to additional municipal taxes of about 3% on lottery winnings.
The next, and hopefully final, Powerball drawing takes place on Wednesday, January 13 at 10:59 p.m. EST. If no winning numbers are drawn, the pool will continue to grow as more people buy tickets.