Let's say you win $10,000. How much will they take out for taxes?
My mother just won $10,000 from a radio contest in Florida. How much will they take out for taxes?
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No idea, but congratulations to your mom!
It’s just income, isn’t it? I’d assume it’s just like tax on any other $10,000 you receive.
Many states have a prize tax, such as states that carry lotteries or legalized gaming. This is different than income tax, and again, varies from state to state and even county to county.
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@rvjsf: really? Or are you just being facetious with your comment?
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Sorry, I have to correct myself from the above assumption: “prize tax” is no different than income tax on the value of the total prize; if your mom won $10,000.00, then that as zaku has stated above, your mom’s winnings will be considered as taxable income by the fed, IRS will still collect.
The news on lottery winnings is even worse; depending on local, state, and federal laws, you could pay as much as 38 percent of your winnings toward a “lottery tax.” Ouch!
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Some of those rates are pretty steep. I guess that’s the cost of free money.
I wonder if the government can still tax your winnings if you placed the in a Roth IRA?
Oh yeah, I’m in Washington state, where we have no sales tax (yay!). We just have an 8.something% retail sales tax, and real estate property taxes.
in NY or NJ about 40% . FL might be different.
I believe that the $10k will be treated like ordinary income, and if she takes it in one lump, will be added to her AGI at tax time. Do check with a CPA however.
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