Mega Millions Powerball Jackpots $414 Million Combined

This week, two massive jackpots are up for grabs: Mega Millions and Powerball combined are worth $414 million.

Both games offer players the choice between 30 annual payments or a one-time cash payout. Both are expanding their prize pools as the odds for winning increase.

Numbers

Mega Millions, a multi-state lottery game, offers some of the nation's biggest jackpots. Tickets are sold across 47 jurisdictions and customers can buy Mega Millions online in an increasing number of states. Winning one of these large prizes may seem unlikely, but several lucky winners have struck it rich - winning prizes worth hundreds of millions of dollars!

In October, Mega Millions' jackpot was increased to an unprecedented $1 billion to encourage even more people to play the game. Drawings take place twice weekly on Tuesday and Friday nights from Atlanta, Georgia and are broadcast live online.

Mega Millions website states the odds for winning the jackpot are 1 in 302,200. Winning either the second prize is one in 15,500 and third and fourth prizes come with odds of one in 25,000.

To win the jackpot, players must correctly match all six numbers drawn. There are five white balls drawn from a pool of 70 and one gold-colored "Mega Ball" drawn from another 25 pool. The jackpot winner has two options: take cash value or opt for annuity payments which pay out an equal amount annually over 30 years.

Since September 18, 2013, this jackpot has been steadily rising until reaching its current value of $1.6 billion. This is now the sixth-largest prize ever won in Maryland and third largest prize ever awarded anywhere in America.

It was initially won by 11 co-workers at an office in California, with two winners coming forward shortly after the drawing. The third winner remains anonymous but has now been identified as having purchased the ticket in Kansas.

In addition to the jackpot, Mega Millions offers eight lower-tier prizes that range in value from $100,000 to $4 million. There are also eight $250,000 matching-number prizes.

In October, Mega Millions lottery revised its rules to boost jackpot payouts. Under the new format, 75 percent of prize pool goes toward paying out the jackpot prize and there's also a "Just the Jackpot" wager which only pays out on winnings.

Odds of winning

Mega Millions Powerball jackpots have grown to an estimated $1 billion, but winning the lottery remains a long shot. Fortune magazine estimates your chances of winning are one in 302.6 million.

The odds of winning Powerball have decreased to one in 292.2 million, but the jackpot continues to climb ahead of Friday night's drawing. It is now the largest in American history and will remain that way until someone claims it.

Though the odds of winning a major lottery are long, there are several steps you can take to increase your chances of success. According to math professor Tim Chartier, buying more tickets increases odds.

You can add a "Megaplier" option to your ticket for $1 extra and multiply any non-jackpot prizes won. This can be an excellent way to increase payouts on smaller prizes, but be sure to include it when purchasing your ticket.

In addition to increasing your chances of winning, purchasing more tickets can also help you avoid missing a number. This concept, known as "recovery," should be taken into consideration when deciding whether or not to play the lottery.

However, winning the lottery is never guaranteed. You need to consider factors like when was the last jackpot won and how often the numbers have been drawn.

One of the most frequently asked questions by lottery players is what are my odds of winning big jackpots. Fortunately, these can easily be calculated using a few straightforward formulas.

You can check your chances of winning Mega Millions and Powerball by visiting the official websites for each lottery game. These websites have comprehensive information about playing these games, including odds for each prize level as well as information on paying state taxes and other game details.

Taxes

If you win the Mega Millions or Powerball jackpots, taxes can take a substantial portion of your prize. Whether or not you opt to receive annual payments over 29 years, your tax bill will depend on whether or not you fall within either the high or low income bracket and what kind of taxable income you have.

Thankfully, you can avoid this by opting to collect your winnings as either a lump sum or one-time cash payment. No matter which option you select, lottery officials will automatically withhold 24 percent of the lump-sum payment as federal taxes.

You may also avoid taxes by claiming your prize through a trust. Certain states allow this, such as Delaware, Georgia, Kansas, Maryland, North Dakota, Ohio and South Carolina.

It is essential to inform both your state and IRS of your decision if this route is taken. Doing so will help guarantee that no fines arise for failing to report winnings.

Although many people opt to claim their prizes anonymously, this may not always be possible. Some states do not permit this practice, so be sure to check with your state first to determine how you can proceed.

To protect yourself legally after winnings, the most common method is to set up a revocable trust. This will shield your identity from IRS investigations and any heirs of yours who inherit assets.

Another viable option is to claim your prize through a blind trust. This keeps your identity concealed and prevents the IRS from taking 25% of your prize as taxes.

If you are thinking of setting up a trust, it is wise to consult a lawyer as soon as possible. They can give you guidance on which option is most advantageous for your individual situation.

Mega Millions and Powerball winnings are generally treated as ordinary income for both federal and state taxes purposes, so winners must report their winnings on Form W-2G.

Money can be at stake when playing the lottery, so it is wise to enlist the services of an experienced team of professionals if you plan to claim your prize. This should include an attorney, financial advisor and tax expert. Claiming a prize can be complex; so get help as soon as possible to avoid any potential issues down the line.

Regulations

Nothing beats the thrill of winning a major lottery prize! However, there are certain regulations to adhere to if your jackpot is particularly large.

First, you must decide whether to accept the cash value of the jackpot as a lump sum or opt for an annuity payment over 30 years. Most winners opt for the latter; however, keep in mind that the IRS typically withholds about 24% of your win when choosing this route.

Once you realize your newfound wealth, you must decide how to share it with friends and family. Unfortunately, word spreads quickly, so you may receive calls or visits from people whom you don't recognize.

Before making any decisions about how to spend your money, it is wise to take some time and carefully consider all options. Enlisting the help of an accountant or financial planner can also be beneficial in this process.

Financial advisers can offer budgeting guidance and suggestions on managing finances after winning the lottery. They may even suggest a strategy for distributing your winnings.

Once you've won the Mega Millions or Powerball jackpot, the state in which you reside must notify you. Registration may take anywhere from 60 to 90 days depending on the length of time this process takes.

In addition to registration, you must fill out IRS Form W-8BEN and sign an affidavit verifying your win in the lottery. In some states, you may be able to file this paperwork electronically.

Additionally, you should check with the state where you reside to see if you possess a special tax identification number. Without one, you will have to pay a higher income tax rate than someone who does.

Once you decide whether you want the game's optional Megaplier, which can multiply non-jackpot prizes up to five times, or not, this could significantly boost your chances of hitting the jackpot.

Mega Millions and Powerball tickets cost just $2 each, with an option to add on $1 for the Megaplier which increases your odds of winning a second prize.