The IRS Just Hit Its Own Version Of A Mega Jackpot – See How Much They Scored!
(USNewsMag.com) – On July 29, an Illinois resident won the second largest Mega Millions jackpot in history: a whopping $1.337 billion. If that person thought they were going to become an overnight billionaire, they were mistaken. To be clear, the winner just became very, very rich — but so did the IRS.
The real winner of the lottery: The IRS pic.twitter.com/aKhlqbmSQf
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When the ticket holder contacts lottery officials to claim their prize, they will have two options. They could choose to receive their money in a lump sum of $780.5 million or have it paid out in annual installments over the next 30 years. Generally, people choose to receive a large, one-time payment.
If the winner of last month’s jackpot chooses the lump sum, the IRS will immediately withhold 24% toward their 2022 taxes, which would leave them with about $593 million. Then, the federal agency also charges a 37% income tax. The ticket holder will owe 13% of that, knocking their winnings down to $491 million.
After the IRS is finished taking its cut, the state of Illinois will want to subtract their 4.5% income tax, leaving the lucky person with $453 million. That means, when all is said and done, the state and federal governments will take about half of the jackpot.
Do you think it’s fair that the government is taking hundreds of millions of dollars from the lottery winner? Should lottery officials advertise the post-tax amount?
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