Not financial advice: It varies by the state where you live, and on how you would choose to have your winnings dispersed to you, a lump sum or a series of annual payments.
Most winners don't opt for annual payments because the payments and the taxes on them are spread out over a period of 26 years. Around 80 percent of winners choose the lump sum option, which is typically about half of the jackpot amount.
Most U.S. lotteries take out 28 percent from the winnings to pay federal taxes. But, if your winnings were in the millions of dollars, you would be paying closer to 39.6 percent (the highest tax bracket) in federal taxes when tax time comes. Add state and local taxes, and you might end up with only half of your winnings when you are done paying taxes.
So if you had opted for the lump sum prize in the $10 million lottery, the prize would be about $5 million.
Just recently, the N.C. Education Lottery had an unusual sales pitch, telling players that hitting it big in 2014 will mean less tax and more winnings. Find out more at The Progressive Pulse.