If you win the lottery and they take out taxes, will you get it back on your income taxes?
Because i was just wondering since you have to pay taxes working and you get it back on your income taxes, will you get them back from lottery winnings?
- 10 years agoFavorite Answer
no, u dont get it back because you owe that money
- Anonymous10 years ago
You don't always get your income tax money back, you only get a refund of the amount you overpaid.
Same is true if you win a big prize. Your tax liability is computed based on your income, then you get a refund if the amount you paid was more than your actual liability.
In most cases, large lottery winnings put people into the highest tax brackets and they don't get much of the money back. In many cases, the people owe MORE money at tax time.
- Anonymous10 years ago
You only get back a refund of what you overpaid into the system. It's much more complicated than this but...For example, if you made $10,000 and the tax is $2,000 but you paid in $2,500, you'll get $500 back. That's only the gov't sending you your own money.
If you win enough in the lottery they will usually take out your taxes before giving you the money, in which case they'll know the exact amount. Sure, some things could change (medical bills, having a child, etc) between tax time and your winnings, but generally they'll take out the correct amount and you won't see any refund. Hope this helps.
- shoredude2Lv 710 years ago
You need to understand taxes. Taxes are what we pay to fund the government. Only those with very low incomes get back all of what they paid in.
Most people do not get their taxes back at tax time. Some people actually owe more. And some people only get a small percentage of what they paid in.
People who win the lottery usually owe more. What is required to be withheld is never enough to cover what is really owed.
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- DanielLv 44 years ago
If the person was smart and invested the money wisely, or put it in a back account that earned interest, then the person would have to pay taxes on the investment profits or the interest. If the person invested badly and lost all the money, then the person would have to work again, and pay income tax. If the person fell somewhere in between these extremes, and, for example, put the money in a back account that did not earn interest, then the person would not have to pay income tax.
- Ryan MLv 710 years ago
Do you understand the CONCEPT of an income tax refund? You only get back, what you OVERPAID. Since you would most likely be in the highest tax bracket...it is pretty hard to overpay taxes when the taxes are already taken out at the highest rate.
- acmeravenLv 710 years ago
Everybody's tax situation is different. You have money withheld from W-2's, 1099's, any number of things. When you run all the various numbers into and through your tax return it is possible that you my get all of it refunded or possibly even owe more; get a free Pub 17 from IRS.GOV and read up on the subject or find a good tax preparer (the older the better).
- JudyLv 710 years ago
You might get some of it back. If your total income, from working, lottery and anything else, is under the limit to owe anything, you'd get all of your withholding back. If your total income is more than the limit to owe anything, you don't get it all back, whether it's from working, lottery, or anything else.
- troLv 710 years ago
depends on your overall gross, if the lottery winnings were huge, very doubtful for much of a refund
if they were small, and your other income was not so big, probably little effect
- falsi fiableLv 710 years ago
Get it back? No, you don't get it back unless you can show no income tax liability. See a tax professional if you won that much money.