Powerball jackpot hits $905 million after taxes

The Powerball jackpot has soared to $905 million after 42 consecutive drawings without a winner. The next drawing is tonight at 10:59 p.m. ET on August 10. Winners can claim the prize as an annuity paid over 30 years or a lump sum of $391.9 million today.

The odds of winning remain astronomically low — 1 in 292.2 million — but for those who beat the odds, taxes will take a massive bite. Federal taxes alone will claim 24% upfront on the lump sum, pushing the winner into the top income bracket. The remaining $297.8 million would then face an additional 37% federal tax in the following year, trimming the take-home sum closer to $247 million. State taxes vary widely — California’s top rate is 13.3%, while other states charge as little as 2.5% or none at all.

Under the annuity option, the winner receives 30 payments that grow 5% each year, totaling about $570 million after federal taxes. But even that comes with a 24% withholding on each check and the same high federal tax burden. The exact take-home amount depends heavily on residency, making state tax laws a critical factor in the final payout.

Financial experts urge winners to proceed carefully. Before claiming the prize, consult a financial advisor and attorney to protect the windfall from poor decisions, family pressures, or legal risks. Many winners lose everything within years due to overspending, failed investments, or scams. A smart plan includes setting aside funds for taxes, paying off debts, and investing wisely — not splurging on luxury items. Whether taking the lump sum or annuity, the real challenge isn’t winning the lottery — it’s keeping the money.