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If you won 5000 a week for life how do you pay taxes on that?

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If you won 5000 a week for life how do you pay taxes on that?

Postby falken8 » Sun Aug 05, 2012 7:09 am

I was just wondering how you pay the taxes on 5000 a week for life from PCH?
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If you won 5000 a week for life how do you pay taxes on that?

Postby cinnfhail » Sun Aug 05, 2012 7:13 am

Well if your are talking about PCH, they will more than likely withhold the required taxes, Does not mean you will not owe additional taxes, they have no idea what your other income might be.

But generally in prize situations they withhold more than the applicable rates. See Circular E for withholding requirements.

If by chance you were to receive income of $5000 a week that they didn't withhold the taxes from; then it is your responsibility to make those payments by estimated payments.
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If you won 5000 a week for life how do you pay taxes on that?

Postby vic » Sun Aug 05, 2012 7:19 am

Well if your are talking about PCH, they will more than likely withhold the required taxes, Does not mean you will not owe additional taxes, they have no idea what your other income might be.

But generally in prize situations they withhold more than the applicable rates. See Circular E for withholding requirements.

If by chance you were to receive income of $5000 a week that they didn't withhold the taxes from; then it is your responsibility to make those payments by estimated payments.
They'd withhold some taxes from every check. At the end of the year, you'd fill out a tax return, showing an annual income of $260,000. You'd pay or get a refund, depending on how much had been withheld, just as you do with any income of any amount.
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If you won 5000 a week for life how do you pay taxes on that?

Postby macklyn » Sun Aug 05, 2012 7:26 am

You would pay it annually based on the amount that you receive each year. I am not sure if you would have to pay earned income tax on it, but you would definitely have to pay a lottery tax.
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If you won 5000 a week for life how do you pay taxes on that?

Postby hillocke » Sun Aug 05, 2012 7:31 am

Every year, you'd file a return showing the amount you got that year as 'other income'.
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If you won 5000 a week for life how do you pay taxes on that?

Postby neued » Sun Aug 05, 2012 7:37 am

Every year, you'd file a return showing the amount you got that year as 'other income'.
Annually when you file your tax return.
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If you won 5000 a week for life how do you pay taxes on that?

Postby harlow » Sun Aug 05, 2012 7:42 am

$260000 a year? figure 35% for federal taxes
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If you won 5000 a week for life how do you pay taxes on that?

Postby daveed92 » Sun Aug 05, 2012 7:47 am

You pay income tax as if you made $260,000 a year.
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