The Powerball jackpot has reached a whopping $1.8 billion after 41 drawings with no winner, making it the second largest in history. The next drawing is on Saturday, giving hopefuls a chance to strike it rich.

If you do win, be prepared for Uncle Sam to take a chunk of your winnings. Federal taxes on lottery prizes are hefty, with a 24% tax rate on any prize over $5,000. The top federal tax rate of 37% will also apply to large prizes like the Powerball.

Choosing between a lump sum payout or annual payments affects how much you take home after taxes. Most winners opt for the lump sum upfront, despite the higher tax hit. An annuity option is available to spread out payments over time but still incurs federal taxes.

State taxes are another factor to consider, with rates varying across the country. Some states, like California, have high tax rates, while others, like Alaska and Texas, don’t charge state tax on income. Be prepared to pay up depending on where you live.

Hitting the jackpot and choosing the lump sum option means taking home around $826 million upfront. After tax withholding, your cash value decreases to about $628 million. Plus, be ready to pay a 37% federal tax rate the following year.

Consider hiring financial advisers and tax professionals to help manage your newfound wealth wisely. Avoid splurging and focus on paying off debts, investing in low-risk options, and setting up a charitable foundation to handle requests and gifting strategies responsibly.

Read more at Yahoo Finance: Powerball jackpot skyrockets to $1.8 billion. Here’s what the winner will take home after taxes.