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If you win the Powerball, how much do you pay in taxes and how much do you take with you?

(CNN Spanish) — The Powerball jackpot is $800 million, the second largest in its history. But don’t get your hopes up so quickly: if you managed to match all the numbers, the prize you would receive is much, much less.

Here’s the math: For next Saturday’s drawing, the cash jackpot — the one most winners choose — is $383.7 million. But that figure does not include taxes.

Calculating taxes is not straightforward and ultimately depends on your particular circumstances. The Internal Revenue Service (IRS) considers lottery winnings as income and the balance to contribute to the federal coffers depends on what your total annual income is.

However, there are some figures that help to get an idea. If you win the jackpot, the prize will be subject to the highest federal tax rate of 37%. That means if you guess right (odds of doing so are 1 in 292.2 million) the sum would come down to about $142 million up front.

Also, depending on where you live, you have to take into account possible state taxes. New York is the state that imposes a higher rate on prizes greater than US$5,000: it is 8.82%. Among the states that will charge you, the one with the lowest rate is North Dakota, which stays with 2.9%.

But there are states that do not apply extra taxes, among which are California and Florida. In that case, your only contribution to government funds would be from the IRS.

Of the total of US$ 800 million promoted, then, you would be left with a maximum of just over US$ 140 million. Much less, but more than enough for almost any wish you have to fulfill.

The odds of hitting the jackpot are extremely low, but this year it happened six times, according to the lottery. If you decide to participate, remember that the drawing takes place on Saturday at 10:59 pm Miami time and that you can watch it live on television or on the Powerball.com site.

If you win a smaller Powerball prize, do you have to pay taxes?

It depends on the sum. The IRS does not apply deductions on prizes up to $600. There are two different situations thereafter: if your prize goes from that figure to $5,000, you must add the gain on your tax return and the figure depends on the calculation final. If the prize is greater than US$5,000, discounts ranging from 24% to 37% are applied.

At the state level there are also variations depending on the amount that you can consult here.

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