Powerball jackpot hits $1.4B as prize continues to grow – and so do the taxes the winner will owe

I won the Powerball jackpot... now what??

You won the Powerball jackpot, but what should you do with the money? Nick Bunio, an expert financial planner from Berwyn, Pennsylvania gave LiveNOW from FOX's Josh Breslow some key advice.

The Powerball jackpot continued to climb to an eye-popping level Wednesday night after yet another drawing passed without a grand-prize winner.

Wednesday's winning numbers were 9, 35, 54, 63, 64, and the Powerball is 1. The Power Play was 2X.

Though the grand prize still stands, 10 players won the game's second-tier prize in Wednesday's drawing. Seven people won $1 million while three people selected the Power Play option to win $2 million.

There have been 33 consecutive drawings without a jackpot winner, leading to Friday’s extraordinary top prize of an estimated $1.4 billion – the Powerball's third-largest jackpot. The cash value is set at an estimated $643.7 million.

2 LOTTERY TICKETS WORTH $2.68 BILLION COMBINED REMAIN UNCLAIMED

The Powerball jackpot now sits at an estimated $1.4 billion for Friday's drawing after no players claimed to match all six winning numbers on Wednesday. (Natalie Kolb/MediaNews Group/Reading Eagle via Getty Images)

The previous Powerball jackpot totaled $1.08 billion and was claimed on July 19 by one person in California.

Drawings are held three times per week: every Monday, Wednesday and Saturday.

POWERBALL JACKPOT GROWS TO AN ESTIMATED $960M- 4TH LARGEST IN HISTORY

Powerball tickets are $2 per play and are sold in 45 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands.

The future tax bill that a lottery winner will see has often garnered attention since the total take-home amount will be far smaller after taxes.

For a jackpot of the current size, a federal withholding tax would apply to it. That tax, worth 24%, shaves quite a bit of money off the final amount the lucky lottery ticket holder would ultimately receive.

MICHIGAN LOTTERY LAUNCHING ‘GHOSTBUSTERS’ TICKET WHERE PLAYERS COULD GET ‘SCARY RICH’

A woman holds Powerball lottery tickets inside a store in Homestead, Florida, on July 19, 2023. (Giorgio Viera / AFP / Getty Images)

The federal income tax also draws from the jackpot later.

It would likely be the highest bracket, which the IRS currently has set for 2023 at 37% for income above $578,125 for non-married individuals. For couples jointly filing, it is at that share for income over $693,750, according to the IRS.

In the event of a one-time cash jackpot payment that makes the 37% bracket come into effect, the winner would therefore see about 13% more go to the federal government after the withholding tax.

Meanwhile, where a jackpot winner calls home oftentimes brings state income taxes into the play.

In nine states, residents aren’t subject to state-levied income taxes. FOX Business previously reported that they include:

Alaska
Florida
Nevada
New Hampshire
South Dakota
Tennessee
Texas
Washington
Wyoming

California, while having an income tax, does not apply state taxes to prizes, according to the California Lottery’s website.

The most recent time that the Powerball grand prize was won was in July. It came in at $1.08 billion at that point. (Tasos Katopodis / File / Getty Images)

USAMega.com revealed the winner of a $1.4 billion jackpot would see $405,568,045 after federal taxes if the one-time cash payout option is chosen, and that doesn't include state taxes, if applicable.

The annuitized payments would come out to 30 payments of $29,437,045, also before any applicable state taxes.

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