Powerball Jackpot Reaches $1.8 Billion for Saturday Drawing

SAN DIEGO, California — The Powerball jackpot has climbed to an impressive $1.8 billion for Saturday night’s drawing, making it the second-largest prize in U.S. lottery history.

Lottery officials announced the jackpot, which has prompted long lines at retailers where eager players are purchasing tickets. The next drawing is set for 10:59 p.m. ET on Saturday.

Players have two options if they win: a lump sum cash option estimated at $826.4 million, or an annuity paid over 30 years that totals $1.8 billion. However, the actual take-home amount will be significantly less due to taxes.

The IRS automatically withholds 24% for prizes exceeding $5,000. For those opting for the lump sum, this withholding reduces winnings to about $628 million. But winners fall into the 37% tax bracket, which means an additional $107 million in federal taxes must be paid, leading to an overall payout of approximately $520.7 million.

“Their last dollars, which they’re going to have a lot of those dollars, are taxed at 37% this year,” said a tax law professor at the University of San Diego.

California winners have an added advantage as the state does not impose taxes on lottery winnings. Many states, however, have tax brackets that can exceed 10% on lottery prizes.

Eric Williams, a local who spent $100 on tickets, expressed optimism despite the hefty tax implications. “If you told me $520 million? That would be good. That would last me a while,” he said. Robert Comacho also hopes for luck, stating, “We’re trying to buy our fortune here. We’ll see what our luck brings us.”

The excitement surrounding the jackpot comes amidst a previous $2 billion Powerball drawing in November 2022, which still holds the record for the largest jackpot ever.

No matter the outcome, experts recommend that winners consult tax professionals and financial advisors to manage their newfound wealth.