The annuity option gives you the whole $1.73 billion pot over a longer time span, but you’ll still see that 24% taken off the top of every payment. And for a large prize like the Powerball, that lump sum will also catapult you into the highest income tax bracket, so you’ll pay the top federal tax rate of 37% the following year. What do federal taxes look like on a lump sum payment? The federal tax rate on any prize over $5,000 is 24%, which gets immediately deducted from your winnings. In truth, most lottery winners opt for the cash lump sum upfront, even though it ultimately means fewer dollars in their pocket - but still a whole lot. You have two choices: lump sum payout or annual payments spread over 30 years. The IRS taxes lottery prizes differently depending on how the winner chooses to get paid.

No matter how lucky you are, Uncle Sam will still come knocking. But how much of the lottery prize would you take home after taxes? We’ll break it down – and suggest five ways to safely invest your windfall. While the odds of becoming a Powerball winner are slim ( 1 in 292.2 million to be exact), it’s hard to resist daydreaming about what you’d do with all that money. Since then, there were 35 consecutive drawings without a jackpot winner. The last Powerball winner also came out of California, way back on July 19. The winning ticket was sold at a liquor store in California. Wednesday night's Powerball drawing yielded a single winning ticket worth a staggering $1.765 billion (yes, billion with a b.) According to the Multi-State Lottery Association, it's the second largest Powerball jackpot ever - and second largest among all U.S.

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