How much taxes on winning the Texas lottery?

Answer 1

I suspect your really asking "....how much taxes will you ultimately pay ...", which is generally different than how much will be taken out, or "withheld" to assure your ultimate payment. It is highly possible you can have nothing withheld (taken out), or a "standard" flat 25% or such may be applied. But the amount you will ultimately pay on the earnings can be substantially different. And it can and normally is different for different people, because of their different situations.

The income will be treated as ordinary income and as such will be taxed at the rate you would be paying at. In essence this can change with deductions you have or can apply. For example, proveable gambling losses may well be deductible against this income. No, there should not be FICA or payroll type taxes due. It (probably) isn't employment type income (unless your a professional gambler). Yes, you must consider the State and if applicable in that State, City and Local taxes too, which varies in all ways and places considerably. Respecfully, the nativete' shown in the question indicates you obviously need specific, hands on professional help to best handle/document and benefit from your (likley new) wealth. However, while it is a fairly modest sum of money, (much less than many annual management bonuses, etc.), I would at least avoid tax return preparation offices in favor of a local CPA or an EA (enrolled agent). Considering it comes along with the big $$...don't expect too much sympathy from others if it all sounds like a complex pain...! Congratulations!!

Answer 2

Annuity or lump sum? Y-THINK-Y Whichever way you accept the winning, it will be taxable when received, and withheld on in accordance with the rules below. How much you actually pay depends on your total income/loss, filing status, number of children/dependnents, etc. However, it is reasonable to think you would be payong at the higher federal rates...about 25% to 32%. The winnings are NOT taxed as capital gains. Your state is also going to want a piece, and of course that depends on the rates where you live. The rules on the withholding on the payout: Payors must withhold 25% on proceeds of more than $5,000 (Code Sec. 3402(q)(1)) from: (1) a wagering transaction in a parimutuel pool with respect to horse races, dog races or jai alai if the amount of the proceeds is at least 300 times as large as the amount wagered; (Code Sec. 3402(q)(3)(C)(ii) ) (2) a wager placed in a state-conducted lottery; (Code Sec. 3402(q)(3)(B)) (3) a sweepstakes, wagering pool or lottery (other than a state-conducted lottery); or (Code Sec. 3402(q)(3)(C)(i)) (4) all other wagering transactions if the amount of the proceeds is at least 300 times as large as the amount wagered. (Code Sec. 3402(q)(3)(A)). “Proceeds” means amount received from the wager reduced by the amount of the wager. (Code Sec. 3402(q)(4)(A)) A person who receives gambling winnings subject to withholding must provide certain information on Form W-2G or Form 5754 and give it to the payor. (Code Sec. 3402(q)(6); Reg § 31.3402(q)-1(e) )

Answer 3

After your 1040 federal income tax return is completely correctly to the line 43 page 2 of your 1040 income tax return TAXABLE INCOME amount. You will have 6 different percentage amounts of marginal tax rates from 10%, 15%, 25%, 28%, 33% and the maximum 35% for the tax year 2010 at this time July 31 2010.

You can find the income amount that the rates would apply to for your filing status by going to the IRS gov website and using the search box for 1040ES and then go to page 8 for the 2010 Tax Rate Schedules

Answer 4

If you have any kind of gambling winnings the payer may have to withhold income tax at a flat 28% rate.

When you complete your federal income tax return correctly and your lottery winnings is large enough you your marginal tax rate maximum amount at this time for the 2009 and 2010 tax year was and is 35% maximum marginal tax rate for an individual taxpayer.

Answer 5

You are the only one that has all of the necessary information that will have to be reported on your income tax return for the year in order to do the calculation for the numbers that you are looking for.

If you would like to do some estimated tax calculations you would need to go to the IRS gov web site and use the search box for 1040ES go to page 7 has the estimated tax worksheet. The tax brackets for 2010 will be on page 8 of the 1040ES.

You would add all of your gross taxable wages from the W-2 forms box 1 wages, salaries, tips, etc and any other net profit from other earnings that you have in your hand and that amount would be a added to all of all of your other worldwide gross income total and that is the amount of income that would be used to start with to calculate your estimated taxes for the year.

You can find the estimated tax worksheet and instructions by using the below enclosed information

If you would like to do some estimated tax calculations you would need to go to the IRS gov web site and use the search box for 1040ES go to page 8 for the 2010 Tax Rate Schedules and page 7 for the worksheet.

You can try anyone of the online estimated tax calculators for some estimates to get an idea of what things may look like after using the correct IRS forms and compare the numbers.

Answer 6

about $500

It is taxed just like any other ordinary income. Therefore how much anyone pays depends on that persons own individual tax situation. No 2 people commonly have the same one and it may vary from 0 to some very high percent for the very wealthy who have expended all possible tax benefits.

Answer 7

The income is ordinary income and taxed at your own individual rate

Answer 8

25% is what it says on the Texas lottery site

Answer 9

on 1 million or more it is 40% max