What you actually get after taxes if you win the Mega Millions lottery

11:53 PM, Dec 27, 2011   |    comments
Friday's jackpot of $500 million is the largest in the history of the game.
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GRAND RAPIDS (WZZM) -- The $206 million jackpot in Tuesday's Mega Millions drawing is a lot of money, but you do not actually get that much.

You have a choice of taking the one-time cash option -- or lump-sum payment -- of $151.9 million before taxes, or you can receive 26 annual payments of about $7.9 million pre-tax.

The federal government takes 25% of the jackpot for income taxes, while the state of Michigan gets 4.35%.

If you take the cash option, it's about $107 million after taxes. The annuity, once taxes are taken out, would pay almost $5.6 million a year for 26 years.

If you total it all up, you end up getting almost $40 million more if you take the annuity.

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