Powerball Jackpot Soars To $1.8 Billion, But Winner May Have To Pay THIS In Federal Tax

(MENAFN- Live Mint) The Powerball jackpot reached an estimated $1.8 billion before Saturday night's drawing, marking the second-largest prize in US lottery history. Winners can choose between a lump sum payout of $826.4 million or an annuity worth $1.80 billion.

The immediate payout includes 29 yearly payments that increase by 5% annually. However, taxes may significantly reduce the final amount. The draw, almost an hour away, scheduled for 10:59 PM ET comes with 1 in about 292 million probability of winning the grand prize.

As the time for next Powerball drawing comes close, it's time to look at federal tax figures that the winner might have to pay.

The Powerball jackpot jumped to $1.8 billion ahead of Saturday night's drawing.

Notably, the Powerball jackpot winner will face a large upfront federal tax withholding. According to IRS, a mandatory 24% withholding is required for prizes over $5,000.

In case the winner chooses $826.4 million cash option, the 24% federal tax withholding will automatically reduce prize money by $198.3 million.

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