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.
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/
if i were to win i would get each of my children iras and make it so they cant touch them until they where 21 for half the amount and 45 for the other half that way they would be able to streach it a little bit and put the rest in a bank account after of course i took my whole family to disneyland on vac
This would be a cool birthday present to win 5,000.00 a week for life sweep stakes. Thank you for the oppertunity. God bless Rodney
I want to win I pray I win .I want to buy a home.
I don’t ever want to be hungry or homeless again thank you pch for giving me a chance to win
Tina Hand
Please just remember to knock loud on my door coz don’t have no door bell yet put on. I can not wait looking forward be in my door at my door step knocking. Thsnk you
God blessed
Good luck
Maria Mccoy
Please just renember to knock on my door real loud coz I do not have a door bell it needs to put one on. Coz I cannot hear it to the back. Maybe try my back door coz I might hear it thank you. I can’t wait that you be knocking on my door step.
Good luck
Maria Mccoy
I medardo florez acept and secure forcoming superpriz no. And activat full elijibility to Win $1,000,000.00 A year For Life, $5/k A Week which is NOW $7,000.00 A Week For Life, “You Can Win it All”, $2,000,000.00 at once (Lump Sum), $10,000.00 A Month For Lifetime A Brand New Lincoln MKZ valued over $37,000.00, gwy no. 3080, PLUS Win $1,000.00 Cash Prize to be awarded in Miami/Ft. laud.FL TV Area my zipcode is (33142) in gwy no. 3814… I wanna wanna Win, make All my Dreams Come True!!!!!
If I could win I would by a home for me and my kids getmy daughter meet ggreet tickets to one direction the British. and Irish boys she’s been waiting for 3 years to see them .I would all so help my family with a new hone and ttheir bills I also would love to help some poor people in my town really wished I could win
Please FATHER I NEED THIS MY FAMILY WOULD BE GRAETFUL (PCH)
I want to win to help myself my husband and our families with their bills ,education for their , children and also our own place to live ,a new car; the old one is shot!!!! we have some health issues that require more that our insurances cover!!!!!
Please let me win 5000 a week for life.Hope to see you soon.I will pay taxes on what I win.
Please let me win the 5000 a week for life.Thanks and hope to see you soon.