Federal and state taxes take a big bite out of lottery jackpot winnings here in Iowa.
If the Redfield, Iowa Powerball winner chose to take her $343.9 million dollar prize in 30 graduated payments over 29 years, a federal withholding tax of 24 percent and state withholding tax of 5 percent would be applied to each payment.
Most winners choose one lump-sum option, which in this jackpot would be a payment of $198.1 million dollars.
The federal withholding tax deducted is $47.5 million dollars, which is 24 percent.
The state withholding is $9.9 million dollars, which is 5 percent.
That leaves the winner an after-tax prize of $140.6 million dollars, still not bad for a $2 dollar investment.
