$1.4 billion is new Powerball jackpot – but taxes slash winnings more than you'd expect

The Powerball jackpot is now $1.4 billion, the fourth-largest in history, but even if you get all the winning numbers, you won’t get $1.4 billion.

That's because the Powerball winner, even though they've beaten the 1-in-292.2 million odds, must pay federal taxes and possibly state and city taxes, depending on where they live.

The winner will find that Powerball and Mega Millions lottery winnings are treated as taxable income. Powerball champs, who are advised to seek financial counsel before making decisions, have two options to collect the prize:

Most winners take the lump sum payout. No one has chosen annuity payments since 2014, according to lottoanalyst.com.

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