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/
I like to win and pay off my son’s education loans.
Pay my home, pay for my teenagers college. A long Vacation for my younger sister who has stage 4 cancer and her family to Walt Disney. Help my community the youths, the elderly, and the Humane Society and help another single working parent who has make ends meet for their children and has cared. I will have more time to volunteer my time to the community. I will also take a nice vacation with my children…which is something most needed. Good Luck to all God Bless.
I want to win!!
If my number is picked for the pch superprize $5,000.00 a week “forever” on Feb.27th I would like the lumb sum payout.
I put my number in your code box think that at was number 3080 and it sw.241.I however just don’t understand why pch directly to where you enter I guess it to late.
P.S David Gray
I WILL BE GLAD TO PAY TAXES – 5,000.00 a week forever lump sum payout
how do you enter the 5,000 a week????
If I was to win this money I would gladly pay my taxes and any other bills I have also my 10 percent to Christ. but most importantly I would thank god for the opportunity to provide my children with a better life to show them another way out .to open their eyes and spread their horizons and to let them know only if u believe. And my faith doesn’t end here I know one day life well get better so I’m putting my best foot forward praying and hoping for better days when mommy don’t have to say no not today . The day I don’t have to see the look on my kids face or the tears that won’t to fall but don’t cause they know mommy is doing the best she can . I pray for victory and a chance to make a change and difference for my children and others and give back to my community .? god bless !!!!
I want claim. My pch lotto. Cash pay. Out. Tiket for pch lotto
I understand about paying taxes now let me win! Come to mommaLol!!
I would give 10 percent to GOD in tithes and offerings First. Then pay off every bill i owe of course pay my taxes. Then invest in a IRA for my children. Also a retirement fund. I have already won I claimed it in JESUS name Amen. Just waiting on the ckeck in my account.
Catina if I won I would buy my mom a new house and pay off her debts she raised 8 of us and 5 family members and never turned away a person who was hungry and she played pch when I was little and never won so I would help others as well my god bless who ever win