How to figure out how much you will owe in taxes?

Question

I'm totally clueless on this. right now i'm a student, and the past 2 yrs I got money back..but let's say I won a lot of money gambling..how can you figure out ahead of time how much you'll owe? example..if I made 12,000 at my job claiming 0 so they take out the most taxes..and I won like 250,000..does anyone know how to figure out how much I would owe?

Answer 1

There are a number of tax calculator sites...I've cited one below...

Answer 2

Assuming that the only change from last year's tax return and this year's tax return is the gambling winnings, just fill out last years tax return and add the $250,000 to it and look in the instructions for the tax tables. Since your income is over $100,000, then you will have to use the tax formulas.

You want 1040 form and instructions to properly determine your total taxes. However, my estimate would be that you will owe the IRS about $80,000.

The good news is that you don't need to pay them until you file your tax return for this year as long as one of the three following conditions are met:

1. You paid in at least 90% of your total taxes due for 2006.
2. You paid in 100% of your total taxes due from 2005 in 2006. This means that if your total tax liability from 2005 was only $500, then you have to have at least $500 withheld from your wages this year.
3. The total amount due on your tax return is less than $1000.

This is the formula that the IRS uses to determine if you owe the underpayment penalty. You can avoid the penalty under the second rule. However, you must still pay the taxes by April 15 of 2007.

Answer 3

If the winnings were from a Gambling Establ;ishment, the establishment deducts the federal tax and hands you a W2G right then and there. In the case of Lottery Winnings. Some states do the same thing, they deduct the taxes and remit the balance to you. In any case you may still be responsible for Estimated Taxes. You would consult a tax accountant in your area, many can be found in the phone book.


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Answer 4

I really need more information. Like are you a dependant for someone? Married? What state you live in? etc. As a general rule I would say 25% will go to state, local, and federal tax's.

Answer 5

You fill out Form 1040-ES which you can get from the IRS website (www.irs.gov). This is the form which is used to figure your estimated taxes.

Answer 6

my accountant says 20% of the total amount is safe.

Answer 7

TURBO Tax

Walks you through step by step. So easy even a gremlin could do it.