Hi my husband just won 10 grand, we live in massachuseets, now i'm sure your all thinking lucky, but here it goes he is going to take the money to pay off a debt he owes for his business to an elderly aunt who lent 30k when his business was floundering. Well I am the only one bring an income into the house. He doesn't understand why iam not thrilled about his goood fortune. Will this effect my income and in turn effect my tax return? I think he should give the ticket to his aunt let her worry about taxes. If he is going to give her the money any way. He isn't offering any of it to me so why should i be happy about it looks to me like i am going to lose from it.
2006-11-04 00:48:58 · 9 answers · asked by jedjgri 2 in Business & Finance ➔ Taxes ➔ United States
No offense to anyone but i really am looking for tax info on these winnings and how it effects my personal taxes. I am planning on taking the kids to Disney with my return i need to find out if his winnings will effect that. i will not be getting one red cent of that 10 grand
2006-11-04 01:01:41 · update #1
if he cashes ticket anyway, i think he might, if i file seperatly will that protect my tax return? he is basicly unemployed.
2006-11-04 01:24:45 · update #2
Yes, lotto winnings will affect your income. I'm assuming you've been filing joint, since that would be the most financially advantageous. If so, depending on what your other income is, you'll likely owe $1500 to $2500 extra in taxes on the lotto winnings. That's federal - I don't know if you'd owe anything to Massachusetts - most states don't tax winnings on their lotteries but I don't know about taxachusetts
You're right that if he hasn't cashed the ticket yet, and just gave the ticket to his aunt to cash, that would put any taxes in her court. Officially and legally, that's not really allowed - the ticket is his, so he's the one responsible for the taxes - he can give her a gift of the money without further tax consequences. But would be a little hard for anyone to trace who started with the ticket, until it's cashed. If he's already cashed it, he could just give her whatever is left over after taxes are paid - but it doesn't really sound from your question like that's what he has in mind. On an amount won that large, they might withhold taxes, maybe even enough to pay them, so (1) he might not get the whole $10,000, and (2) you might even make out, if the withholding is more than the taxes end up. You could call the state lottery office and ask them if they withhold anything, and if so, what percent.
Filing separately won't help you a lot, since although you wouldn't have to pay tax on the lotto win, you'd pay a higher rate on your own income, and could lose credits that you might get if you file joint. If you've been filing separately all along, then the lotto winnings are his tax problem, not yours, and it wouldn't cost you any extra.
You mention that he has/had a business. Does he have earnings from that, and just keep them separate from your funds? Does he file taxes on that, and you file separately?
This sounds like a real mess in the making.
Good luck.
2006-11-04 13:19:48 · answer #1 · answered by Judy 7 · 0⤊ 0⤋
Yes, your husband's winnings will increase your taxable income and increase your tax bill.
While technically if your husband gave the winning ticket to his aunt he would still owe the taxes (the transfer of the ticket would be considered a gift) it is unlikely that the IRS would know that it was your husband who originally had the ticket and therefore the burden for reporting the income would fall on his aunt.
2006-11-04 01:53:18 · answer #2 · answered by Anonymous · 1⤊ 0⤋
Your lotto winnings are taxable in your Federal go back. The well information is that you can be capable to take a deduction for any playing losses you'll be able to file should you itemize on a Schedule A.
2016-09-01 07:01:05 · answer #3 · answered by Anonymous · 0⤊ 0⤋
It will affect you taxes. You can give her the ticket for her to cash and pay tax on, this contrary to another answer would have no effect on your taxes as you are allowed to give up to $12,000 to any single indiv with no tax effect. Or, if you have already cashed the ticket, make a payment of Estimated tax to the IRS and give her the rest of the money toward the debt.
2006-11-04 09:13:49 · answer #4 · answered by irongrama 6 · 0⤊ 0⤋
Yes, if filing jointly it will add to your income and you will ave to pay state and federal income tax on it. I would give the ticket to the aunt if she getting the whole 10,000 anyway.
2006-11-04 01:21:04 · answer #5 · answered by Fly Boy 4 · 1⤊ 0⤋
The winnings are taxable to him. If you file a joint retrun the amount would have to be included in income. You could deduct gambling loses to the extent of winnings as an itemized deduction.
2006-11-04 01:50:56 · answer #6 · answered by waggy_33 6 · 1⤊ 0⤋
If you're married and file jointly, then yes, it will affect you as well as all income, including winnings, must be claimed on your income tax return.
2006-11-04 01:03:40 · answer #7 · answered by schaianne 5 · 1⤊ 0⤋
It is taxable income. If you file separately, neither of you can itemize deductions. If you normally itemize, you may better off filing jointly than trying to reduce the income on your return by filing separately.
2006-11-04 09:25:32 · answer #8 · answered by STEVEN F 7 · 0⤊ 1⤋
sometimes a blessing is perceived to be a curse, I think you are still better off now.
2006-11-04 00:51:18 · answer #9 · answered by Anonymous · 0⤊ 0⤋