Steps for paying taxes on prize wins
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.
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/
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This would be the answer to my prayers.
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ill be glad to pay taxes
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
If you win, you’re not the only one who wins, Uncle Sam too.
Chances to win is slim, but who knows that slim chance
is meant for me!
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1 millon every week for life
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Maid in the shade
1 millon every week for life
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I want to win publishers clearing house superprize 1830 3080 april30th,
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.
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!!!
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Remember to knock really loud. My door bell does not work. Need home repairs! !Lol
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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 .