If You Win the $1.5B Powerball Jackpot, How Much Will You Lose to Uncle Sam?
Right about now, the numbers determining who the person or family is that gets to walk way with the $1.5 billion Powerball lottery, the largest in history, are being drawn, and everyone who bought a ticket or a dozen is delirious with the thought that it just might be them.
We've all looked at our pay stub and irritably wondered just who this FICA guy is and why he's taken so much of your money. Now imagine that -- times about 100 million.
Federal taxes account for a whopping 25% of the overall tax withholding on a lottery win. In this case that'll be an astounding $375 million -- or nearly the entire net worth of Hollywood heavy hitters Johnny Depp, Jack Nicholson or David Letterman.
Nearly 3% -- $45 million, the yearly earnings of singer/musician Michael Buble or supermodel Gisele Bundchen -- will be taken by the state.
But don't worry -- it all goes toward good causes, and it still leaves you with an impressive $1.08 billion.
But keep in mind that if you take the lump sum, as opposed to quarterly payments, your initial winnings are reduced to about $930 million pretax, but the deduction percentages don't change, making your total take-home "only" about $669.6 million -- which puts you in the same ballpark with legendary songstresses Celine Dion and Madonna.