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Steps for paying taxes on prize wins

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One may have confused about paying taxes on prize wins, but yes, it is true that you need to pay for your net income, whether it is from the prize. Winning a reward from a lottery, quiz show or some other event can be a withdrawing experience, but it is significant not to expend the full quantity of your prizes. The Internal Revenue Service (IRS) taxes awards won just like any other basis of revenue.

According to the IRS (www.irs.gov), prize money earned must be stated in standard 1040 tax form as “other income.” The overall amount of tax you will have to reimburse on prize earnings is founded on your bordering central tax amount plus any appropriate state taxes. You can compute an approximation for paying taxes on prize wins from your tax return from last year.

www irs gov Steps for paying taxes on prize wins

Paying Taxes on Wins

Your adjusted gross income (AGI) registered on your 1040 tax form from last year should be noted down. This amount will be registered. If you need a precise computation of the tax owed based on your revenue from this year, you need to fill up a new 1040 form with your income evidence from this year to estimate your AGI for this year.

Browse on “Bank rate: 2013 tax bracket rates” site and inquire your bordering tax rate founded on your AGI. The minimal tax rate is the rate you recompense on the final dollar you make. For example, if you make $1, 00,000 a year as a single filer, your minimal tax rate is 25 percent because $1, 00,000 falls in the $89,351 to $186,350 recorded on the chart.

Multiply the prize quantity by your minimal tax rate. This is the quantity of federal tax you will owe on the prize. If the prize is big, some of the prizes might be taxed at an increased rate. This applied to recurring payments on cash sweepstakes or other. For instance, if your earning is $50,000 a year and you are awarded a $50,000 prize, the prize money will be taxed at 25 percent till $89,351, but the remaining of the prize will lie in an increased mount of tax support, in this case at 28 percent.

Sum your state’s applicable taxes to the amount from considering the entire amount of taxes payable on the prize. State income tax rates differ. The department of income website for your state should list tax rate info. If the state tax rate is 10 percent, reproduce the money prize amount by 10 percent the result is to be added to the calculated minimal tax.

If someone has confusion about paying taxes on prize wins, he should consult with tax expertise who can suggest him properly for this issue.

Get more info at: http://www.irs.gov/

Steps for paying taxes on prize wins 4.40/5 (88.00%) 10 votes

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Juliette is a professional sweeper with a great expertise. She started this sweepstakes blog in 2007 to share tips and advices Google+

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22 Responses to “Steps for paying taxes on prize wins”

  1. Janice L Chase says:

    I will be paying my taxes on my superprize mega prize out of my winnings should I win. And Win I will.Win I Die My Son And Daughter James Chase And Teaerra Chase Will be inherent my winnings. Thank you Janice L Chase Love you guys god bless y’all

  2. Lois says:

    This would be the answer to my prayers.

  3. Nicholas Adam Underwood Reagan says:

    I believe in the pch prize patrol…I wish that they would knock on my door in august ive been in it to win it all…..please give me the privilege of winning…this would be such a blessing I dont know what I would do if I didnt have a chance win of a lifetime… but theres a gold mind !!between your ears and mine

  4. Joy Igiewe says:

    AFTER I WIN THE BIGGER SUPERPRIZE # 3080,3577 I WILL PAY TAXES. CAN I GET A LEE WAY WIN, THANKS.

  5. carol miller says:

    ill be glad to pay taxes

  6. Brenda Car;tpm says:

    when I win the money then I will worry about paying the taxes . I am sure my son will tell lmd when to pay the taxes.abut they will get payed.Uncle sam will take half of the money or more.We just have to make sue he is payed. Brenda Carlton

  7. Mariano says:

    If you win, you’re not the only one who wins, Uncle Sam too.

  8. Mariano says:

    Chances to win is slim, but who knows that slim chance
    is meant for me!

  9. Brenda Utley says:

    I got 99 problems and PCH prize patrol is the only one that can solve the those 99 problems…

  10. kenneth lucas says:

    1 millon every week for life
    I want to win Publishers Clearing house superprize 1830 3080 june 30th winning that money taxs paid
    Maid in the shade

  11. kenneth lucas says:

    1 millon every week for life
    I want to win Publishers Clearing house superprize 1830 3080 june 30th

  12. EVANS OHEMENG says:

    I WANT TO WIN THE DREAM LIFE CHANGING FROM PCH GWY NO. 3600

  13. kenneth lucas says:

    I want to win publishers clearing house superprize 1830 3080 april30th,

  14. OLLIE says:

    OLLIE MCNEIL SAID..
    APRIL 19, 2014 AT 5;09 PM

    I know that when ever you win something like the lottery or publisher clearing that you would have to pay taxes on anything that you MAY WIN. I KNOW THAT UNCLE SAM WANTED HIS SHARE.AS WE KNOW THAT GOD GET10%AND ALL OVER BELONG TO YOU. IDON;T MIND PAYING TAXES BECAUSE THAT THE LAW TO GIVE UP 10% OF ANYTHING THAT YOU WIN CONTAING TO MONEY.

  15. nicholas adam underwood reagan says:

    well if im a fool for believing god is going to help me win april 30th 2014 then as god as my witness then i am that fool, cause im in it to win it!!!

  16. Joy Igiewe says:

    HELLO PCH.COM I WILL ALWAYS PAY TAXES. I WANT TO WIN THE PCHSEARCH AND WIN THE SUPERPRIZE THAT IS OFFERED STAT.(RIGHT AWAY).

  17. Timothy Ruelas says:

    Hello everyone @pchsearch&win this is Timothy j. Ruelas I want to win & be the next superprize winner on April 30th….how is everyone doing good I hope work is good bill’s are paid all is good & everything is going good on my end im staying buisy pchsearch&win $7k a wk for life on April 30th blessing’s all im tired & ready for bed after my entry night all

  18. nicholas adam underwood reagan says:

    Dear Danielle, Todd, And Handsome Dave April 29th is my birthday i have been entering my information “forever” because your super prize is a “FOREVER” Blessing.. And I Think You Should Know I’M IN IT TO WI IT!…I BELIEVE I WILL GET THE CHANCE TO MEET YOU ON THE #)TH OF APRIL… AND GOD KNOWS I NEED THIS OPPORTUNITY I WOULD BE FoREVER GRATEFUL AND THANKFUL CAUSE MY BEAUTIFUL DAUGHTERS WOULD HAVE NO FINANCIAl WORRIES PLEASE KNOCK AT MY WATSONVILLE RESIDENTS ON THE #)TH WHAT A BEAUTIFUL GIFT AND BIRTHDAY PRESENT IT WOULD BE

  19. Mr.Radford Barnes says:

    Hi Publishers Clearing House To Mr. Todd Sloane Senior Vice President Mr. Dave And Mrs. Danielle I Look For All Today To Come Virginia On Feb 28th Please What All Come Today Wanna To Win $10 Million Super Prize And Plus Bonus $50,000.00 Please Let Me Know Do Have Bad Heart Want To Be Happy Today My Email I Look On FaceBook Today When See Newalla,Ok Please Make Me HappyYour Come Monday Be Look for

  20. Sabrina McRae says:

    Remember to knock really loud. My door bell does not work. Need home repairs! !Lol

  21. MaryPhillips says:

    PAY TAXES WE ALL WAYS DO ,,there’s nothing free in Life cash & prizes ,trips ,,I WANT TO WIN #PCH# KNOCKKNOCK <<For THE FAMILY #3080

  22. Tina Thomas says:

    Juliette if i won i would put that money into Ira’s and look quick before Uncle Sam Got his hand’s on all of it i know one thing i would love to win something as everybody else out there, you take care of yourself Happy Valentines Day .

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