America’s newest billionaire – thanks to a record-setting $2.04 billion Powerball ticket purchased at a gas station in California – may not be a billionaire for very long. Lottery winnings are treated as taxable income. Powerball winners, who are advised to seek financial counsel before making decisions, have two options to collect the prize: 💰$997.6 million in a lump sum. 💰About $2 billion in an annuity of 30 graduated payments over 29 years. Most winners take the lump sum payout. No one has chosen annuity payments since 2014, according to Axios. If our winner takes the $997.6 million lump sum, they'll automatically pay the IRS $239.4 million, or 24% off the top in federal tax withholding, according to Forbes. The total lump sum is subject to a federal tax rate of up to 37% paying another $129.7 million in addition to the $239.4 million withheld by the California Lottery. All this would be part of our winner's 2022 federal income tax return and would ultimately leave them with $628.5 million, assuming no other deductions.