A single lottery sold in Arizona is going to change someone’s life – after the IRS gets a bit of the unexpected winnings, of course. The Powerball lottery on Wednesday night resulted in a ticket matching the six numbers drawn to reach the $ 473.1 million jackpot. The amount was higher than expected due to strong ticket sales. More from Personal Finance: See How You Can Buy New Workwear on a Budget These are the best and worst places in the US to die. The IRS has sent more than 78 million refunds The amount advertised is not what the winner will end up with. Whether the prize is received as an income of 30 payments for 29 years or as a direct, reduced amount of cash, taxes end up consuming a fairly large amount of the profits. For this jackpot, a required 24% federal withholding tax would reduce the $ 283.3 million cash choice – chosen by most jackpot winners – by about $ 68 million. However, the maximum federal interest rate is 37%, so it should generally be due at taxation. For illustrative purposes: If the winner did not have a reduction in income – for example, significant charitable contributions from the profits – another 13%, or $ 36.8 million, would be due to the IRS ($ 104.8 million in total). Taxes will also be withheld in the state of Arizona, although the exact amount is not clear. The winner will have 180 days to claim the prize.
