There’s another Mega Millions drawing August 4 (that's tonight!) and the advertised jackpot has climbed to $1.35 billion. That’s an estimated cash payout of about $659.5 million, which is the fourth-largest prize in Mega Millions history. However, the Mega Millions winner will have to pay considerable federal taxes.
The IRS takes federal tax “off the top.” But the winner then pays additional federal income taxes based on the tax rate tied to their federal tax bracket, which will be high due to the multi-billion-dollar payout. Depending on where they live, the winner may also pay state taxes. (The same is true for a Powerball winner.)
