Mega Millions Jackpot Reaches Record-Breaking $785 Million - Here's What the Tax Bill Could Look Like for a Winner

Players of the Mega Millions game may be dreaming about what they could do with an extra $785 million, the game's current jackpot amount. With such a large sum of money at stake, it's no wonder that so many people are playing. Who knows, maybe one of them will be the lucky winner!

If they win the lottery, one way they should count on using it is sharing a slice with the IRS.

After no tickets matched all six numbers drawn Friday night, the jackpot climbed again, according to Mega Millions officials. This marks the fourth time in the game’s history that the top prize has gone above $700 million. In the previous three instances, those jackpots ended up being worth more than $1 billion when they were won.

As we near retirement, it's important to be aware of all our options for saving for healthcare costs. Health savings accounts can be a great way to set aside money for these expenses, and more changes to the U.S. retirement system are on the way. Here are some tips to help you build your emergency savings this year so you can be prepared for whatever comes your way.

The jackpot has been increasing through twice-weekly drawings since mid-October with no winner. If someone wins it in the next drawing – set for Tuesday night – this $785 million prize would rank as the sixth-largest lottery prize ever won and the fourth-largest Mega Millions prize.

If you were to choose the advertised annuity option, you would receive your winnings spread out over three decades. However, most winners choose the lump-sum cash option, which as of mid-day Tuesday is worth $403.8 million.

No matter how you choose to receive your windfall, taxes will take a portion of it.

If you were to choose the cash option, a mandatory 24% federal tax withholding would reduce the $403.8 million by $96.9 million. That would reduce your take to $306.9 million.

You may owe more to the IRS at tax time if your income is above certain thresholds. For individual tax filers, the top federal income tax rate of 37% applies to income above $578,125. For married couples who file a joint tax return, the top rate applies to income above $693,750.

Unless you're able to reduce your taxable income, you would owe an additional 13% in taxes, which would bring your total winnings down to $254.4 million.

There may also be state or local taxes depending on where the ticket was purchased and where you live. These taxes can range from nothing to over 10%.The odds of a single ticket matching all six numbers to land the jackpot in Mega Millions is about 1 in 302.6 million. This means that most players won't have to worry about paying millions of dollars in taxes to the IRS or state coffers.

The Powerball jackpot is currently at $291 million, with a cash option of $147.9 million. The odds of winning the jackpot are 1 in 292 million.