The record Powerball jackpot just keeps on growing.
After a record number of lottery tickets were sold on Thursday, lottery officials have increased the jackpot to $800m on Friday and predict it could climb even higher before Saturday’s night drawing.
While the odds of winning the record jackpot stand at one in 292.2m, one thing is certain: a large chunk of the winnings will likely be claimed by the IRS.
Before the winner (or winners) will get to see their money, the government will claim 25% of the winnings, according to CNN Money. Lottery winnings are considered taxable income and the 1% – to which the winner will belong to – are taxed at 39.6%. The rest of the taxes will be owed at tax time. There might also be state and local taxes.
Taxation will also depend on whether the winner opts for the one-time lump sum of $496m in cash or for the full $800m distributed in annual payments over 29 years. If the winner lives in New York City and opts for a lump sum, he or she might have to fork over 40% of the winnings. After taxes, they’d walk away with little more than $309m.
If ticket sales continue to climb, the Powerball jackpot could rise again before the drawing, Gary Grief, executive director of the Texas Lottery, told the Associated Press. According to him, Powerball sales on Thursday were double the previous record for that day.
The previous record for the biggest US jackpot was set in 2012 by Mega Millions. It was $656m.
The current jackpot has been growing since 4 November. It started at $40m and has been growing at a faster rate as more people have purchased tickets.
