Winning millions in the Powerball jackpot propels you into the top federal income tax bracket, which can have a significant impact on your taxable income.
In 2023, the 37% tax rate applies to taxable income of $578,126 or more for single filers and $693,751 or higher for married couples filing jointly.
The calculation of taxable income involves subtracting either the standard or itemized deductions from your adjusted gross income.
It’s important to understand that the 37% rate does not apply to your entire taxable income
Single filers for 2023 will owe $174,238.25, plus 37% of any amount exceeding $578,125.
Married couples filing jointly will owe $186,601.50, plus 37% of the portion above $693,750.
Additional tax liabilities depend on various factors but can potentially amount to millions more.
Maximizing Your Powerball Jackpot: Taxes, Strategies, and Financial Consideration