If you win a Mega Millions jackpot of $740 million, the amount you take home after taxes will depend on several factors, including your choice of payout and your tax situation.
Winners typically have two options: a lump sum or an annuity. The lump sum is significantly less than the advertised jackpot.
For a $740 million jackpot, the lump sum might be around $370 million, depending on the current cash value of the jackpot.
When you claim your winnings, the IRS will withhold 24% immediately. For a lump sum of approximately $370 million, this initial withholding would amount to about $88.8 million, leaving you with around $281.2 million.
However, because the total income may place you in the highest federal tax bracket of 37%, you could owe additional taxes when you file your tax return.
This could result in an overall tax liability of up to $136.9 million, reducing your final take-home amount to roughly $233.1 million after accounting for the additional taxes owed.
Depending on your state of residence, you may also owe state taxes. States like New York have high tax rates on lottery winnings, which could further reduce your total. In contrast, states like Florida and Texas do not tax lottery winnings.
In summary, after federal and potential state taxes, a $740 million Mega Millions winner could take home approximately $233.1 million, but this amount can vary based on specific circumstances and state tax laws.