If you win $10,000,000 for a prize, say from PCH, what would you recieve after the government takes taxes out?

Question

I was just wondering if you take the regular percent out (whatever that is, if someone knows) or if it changes under these circumstances.....sorry if this is stupid.....oh and if it helps I live in Indiana if taxes change from state to state and I'm pretty sure it does.
(PCH= Publishers Clearing House)

Answer 1

The MAXIMUM Federal tax rate is currently 35%. Indiana's tax rate is 3.4% Some counties also have county income tax. As I read the chart, the highest county rate is 1.5%.

Answer 2

Winning 10 million would automatically put you in the top tax bracket so you would have the top federal rate applied to the prize. The state amount would vary depending on your state's income tax rates, if any.

However, I was reading something recently that in my state, they only withhold 25% federal tax if you win the lotto. If you don't recognize this and send in a supplemental payment, you will owe big time when you do your taxes at the end of the year and most likely have penalties for not paying enough during the year.

Losing that much in taxes hurts but hey, it's all free money that you won anyway, right?

Answer 3

You'd pay tax on the prize as ordinary income for federal, so it depends on how much other income you have since that determines your tax bracket. They might take out more than that from the initial prize, but if they do, you'd get the excess back as a refund when you file your return.

Then add on state tax - Indiana 3.4%.

So unless you already have a pretty high income, you'd probably get to keep 2/3 of the prize or more.

Answer 4

The FEDERAL government takes approximately 40% -- your state government may differ (the website below, for the IRS, can assist with amounts). Check with your state tax department (website below) to determine what the percentage would be. Some states are 0% -- others up to 25%.

How much you pay doesn't have anything to do with whether you worked for it, or received it as a prize (the only time there is a difference is with gifted money). The percentage is based on the amount that you received which determines your tax bracket.

Answer 5

Prize winnings are taxed by the IRS as ordinary income. Winning $10 million would put you well into the top tax bracket for the year, which for 2007, is 35%. So you could count on owing somewhere around $3.5 million to the feds. You would also owe 3.4% to Indiana, which would be around $340,000. I'm not sure about any local taxes you might owe in Indiana. So you could expect to walk away, after taxes, with approximately $6,160,000. Not too shabby!

Answer 6

Win 10 Million Pch

Answer 7

The government takes about 40% for taxes

Answer 8

Pch Ten Million

Answer 9

it changes because you didn't work for it. You'd get slightly more than half