Understanding What the $1.8B Powerball Winner Will Actually Keep

Saturday, 27 December 2025, 02:03

How much money the $1.8B Powerball winner actually brings home is often less than expected. This article explores the taxes and deductions that affect lottery winnings, providing an insightful analysis for potential winners.

Thehill — Understanding What the $1.8B Powerball Winner Will Actually Keep

Understanding Tax Implications for Lottery Winnings

The excitement of winning the Powerball jackpot often overshadows the reality of what is left after taxes. Let's break down the figures to clarify.

Taxes on Lottery Winnings

Federal Taxes: Typically, winners face a federal tax rate of 24% on winnings over $5,000.
State Taxes: Depending on the state, additional taxes can range from 0% to as much as 8.82%.
Local Taxes: Some winners may also incur local taxes, further reducing their take-home amount.

Choosing the Right Payment Option

Winners can often choose between a lump-sum payment and an annuity payment plan.
Lump-sum payments result in a significant immediate tax hit, while annuities spread the tax burden more evenly over years.

Ultimately, how much money a $1.8B Powerball winner takes home can vary drastically. That’s why understanding your tax obligations is crucial.

This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.