The $1.9 billion Powerball jackpot is up for grabs. Here is the tax bill

Whoever is the next jackpot winner in Powerball will see the biggest lottery prize ever awarded.

The tax bill will also be quite impressive.

After no one hit all six numbers drawn on Saturday, the Powerball jackpot increased. For Monday night’s draw, it is now estimated to be $1.9 billion if taken as an annuity spread over three decades and $929.1 million if received as a lump sum in cash, a difference of almost a billion dollars.

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Nowadays, the annuity option is more important than it used to be, compared to the cash option, due to higher interest rates that allow the game to fund larger payout prizes, according to the Multi-State Lottery Association, which operates Powerball. The cash option, however, is driven by ticket sales.

The top prize has increased through draws three times a week since Aug. 3, when a ticket purchased in Pennsylvania matched all six numbers drawn to land a $206.9 million jackpot.

Assuming you were like most winners and chose the cash optiona 24% federal withholding tax would reduce the $929.1 million from $223 million.

However, more would likely be owed to the IRS at tax time. The top federal tax rate is 37% and applies this year to income over $539,900 for single filers and $647,850 for married couples. Next year the best rate is taxed on income over $578,125 (individuals) and $693,750 (married couples).

This means that unless you can reduce your taxable income by, say, make charitable donations, another 13% — or about $120.8 million — would be owed to the IRS. That would translate to a total of $343.8 million in federal coffers, leaving you with $585.3 million.

State taxes may also be due, depending on where the ticket was purchased and your place of residence. While some jurisdictions have no income tax – or do not tax lottery winnings – others impose a top tax rate of over 10%.

In the meantime, if you were to elect the amount to be annuitized, it would be taxed as it is distributed each year and would be subject to the tax rates then in effect.

The chance of a single ticket hitting the Powerball jackpot is approximately 1 in 292 million.

That’s a little better than the 1 in 302 million odds that come with Mega Millions, whose top prize is $154 million ($74.7 million in cash) for Tuesday night’s draw.