{"id":119253,"date":"2021-08-03T19:15:41","date_gmt":"2021-08-03T19:15:41","guid":{"rendered":"https:\/\/fin2me.com\/?p=119253"},"modified":"2021-08-03T19:15:41","modified_gmt":"2021-08-03T19:15:41","slug":"heres-how-much-2021-winners-of-mega-millions-and-powerball-have-forked-over-in-taxes","status":"publish","type":"post","link":"https:\/\/fin2me.com\/business\/heres-how-much-2021-winners-of-mega-millions-and-powerball-have-forked-over-in-taxes\/","title":{"rendered":"Here&#x27;s how much 2021 winners of Mega Millions and Powerball have forked over in taxes"},"content":{"rendered":"<ul>\n<li>This year&#x27;s winners of Powerball and Mega Millions jackpots have collectively paid roughly $515 million to the IRS so far via 24% withholding on their windfalls.<\/li>\n<li>The top tax rate of 37% means winners can expect to owe more.<\/li>\n<li>The chance of winning Powerball is about 1 in 292 million; for Mega Millions, it&#x27;s 1 in 302 million.<\/li>\n<\/ul>\n<p>When it comes to the lottery, it&#x27;s been a good year so far for Uncle Sam.<\/p>\n<p>Winners of Powerball and Mega Millions jackpots \u2014 worth an advertised $2.9 billion in all \u2014 have collectively paid roughly $515 million to the IRS in 2021 taxes. And that won&#x27;t be the end of it.<\/p>\n<p>Whether jackpot winners go with the immediate, reduced cash option (most do) or an annuity stretched across three decades, 24% is withheld for federal taxes. Yet because the top rate of 37% is applied to income above $523,600 (single tax filers) and $628,300 (married couples filing jointly), more ends up being owed.<\/p>\n<p>So far in 2021, there have been five Powerball jackpot winners \u2014 and the pace of those wins could pick up, because a third weekly drawing will be added on Mondays starting Aug. 23.<\/p>\n<p>Mega Millions, meanwhile, has had four winners this year (its $55 million jackpot won on June 8 remains unclaimed, however). For all collected prizes, winners have chosen the cash option instead of the annuity.<\/p>\n<p>For the three claimed Mega Millions jackpots \u2014 which have ranged from $96 million to $1 billion \u2014 winners&#x27; cash options were worth a combined $1.2 billion. The 24% federal tax withholding has totaled $288 million, reducing the collective take to $912 million.<\/p>\n<p><strong>More from Personal Finance:<\/strong><br \/>Here\u2019s where return-to-office plans stand now<br \/>Where to put emergency cash amid rising inflation<br \/>Some summer activities can impact your taxes<\/p>\n<p>Powerball winners&#x27; cash options have totaled $945.7 million, with jackpot amounts ranging from $23.2 million to $731.1 million. After the 24% federal withholding of $227 million, winners were left with $718.7 million.<\/p>\n<p>For illustration purposes: If winners were unable to reduce their taxable income at all, another 13% \u2014 the difference between the 24% withheld and the top tax rate of 37% \u2014 would be due to Uncle Sam. Collectively, that would be another $278.9 million or so going to federal coffers ($793.9 million altogether).<\/p>\n<p>Of course, those lottery wins generally contribute just a drip in the federal tax bucket. Income taxes paid by individuals are expected to comprise about $1.9 trillion (50%) of the government&#x27;s estimated $3.8 trillion in revenue for fiscal year 2021.<\/p>\n<p>Local coffers also benefit from big lottery wins, as well. Depending on where the ticket was purchased, state taxes ranging from zero to more than 8% also would be applied.<\/p>\n<p>Like the federal withholding rate on jackpot wins, the amount withheld for state taxes might also be less than what you&#x27;ll owe.<\/p>\n<p>There are ways to reduce how much of your winnings get taxed, although not many. For 2021, due to a temporary change in federal rules, the charitably inclined can lower their taxable income by making a qualified cash donation worth up to 100% of their adjusted gross income (that limit is scheduled to revert back to 60% in 2022).<\/p>\n<p>Some lottery winners set up their own charitable foundation or similar option, such as a donor-advised fund, and donate a portion of their windfall to it.<\/p>\n<p>The Mega Millions jackpot is $179 million ($129.5 million cash option) for Tuesday night&#x27;s drawing. Powerball&#x27;s jackpot is $211 million (cash option of $153.9 million), with the next drawing set for Wednesday night.<\/p>\n<p>Your chance of winning Powerball is about 1 in 292 million. For Mega Millions, it&#x27;s 1 in 302 million.<\/p>\n<p>Source: <a href=\"https:\/\/www.cnbc.com\/2021\/08\/03\/how-much-mega-millions-powerball-winners-have-paid-in-2021-taxes.html\" target=\"_blank\" rel=\"noopener\">Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>This year&#x27;s winners of Powerball and Mega Millions jackpots have collectively paid roughly $515 million to the IRS so far via 24% withholding on their [&#8230;]<\/p>\n","protected":false},"author":3,"featured_media":119252,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Here&#x27;s how much 2021 winners of Mega Millions and Powerball have forked over in taxes - Fin2me<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fin2me.com\/business\/heres-how-much-2021-winners-of-mega-millions-and-powerball-have-forked-over-in-taxes\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Here&#x27;s how much 2021 winners of Mega Millions and Powerball have forked over in taxes - 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