Tuesday could be a big day for you if you are the sole winner of the $1.6 billion Mega Millions prize, but before you start thinking about quitting work and what you can buy, you first have to know your take-home pay.
Let’s assume you take the lump-sum payout on the $1.6 billion, which is $904.9 million. The federal government takes 24 percent of it right away for taxes, which leaves you with $687.7 million. If you are in the nine states that don’t tax lottery winnings, you’re good.
But for the other 41 states, state taxes will lower that payout to anywhere from $658 million in Indiana to $608 million in New York, according to USA Mega, a website that calculates taxes on lottery winnings.
After that, the winner will owe another 13 percent — the difference between federal withholding of 24 percent and the top tax rate of 37 percent. That brings the number down in New York to $528 million, $569 million in Indiana and $599 million in the nine states with no state tax on winnings.
For argument’s sake, we’ll put the net winnings at $550 million. So what is that worth in the sports world?
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With $550 million, you could have paid the payroll of the Boston Red Sox ($229M), Los Angeles Dodgers ($200M) and Cincinnati Reds ($101M).
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$550 million is approximately what LeBron James will have net on and off the court (on $1.1 billion in earnings) by the end of next season.
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With $550 million, you could finance a deal to buy the Detroit Red Wings.
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With $550 million, you could be a top sponsor of the 2020, 2022, 2024, 2026, 2028 and 2030 Olympic Games and have $250 million to advertise it.
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$550 million is approximately the post-tax, on-field earnings of Derek Jeter, CC Sabathia, Mark Teixeira, Mariano Rivera, Andy Pettitte and Jorge Posada.
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With $550 million, you can buy the LA Galaxy with cash and have at least $50 million left over.
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$550 million is the approximate net worth of Floyd Mayweather, though we have no idea what he has spent.
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For $550 million, you could build an NBA arena in a smaller market. That’s about what it cost the Milwaukee Bucks and their taxpayers. Four years ago, the winning bid for the Bucks themselves was $550 million!