Taxes

A:

For tax purposes, lottery winnings count as regular individual income, just like wages, with the rate is based on the taxpayer's total earnings. A lottery jackpot will probably be taxed at the highest federal individual tax rate, which in 2014 was 39.6 percent, according to the Tax Foundation.

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  • How is tax added to a price?

    Q: How is tax added to a price?

    A: Tax is added to the price of a product by first determining the tax amount by multiplying the tax rate by the product price, and then adding the tax amount to the product price, according to the Basic-mathematics.com. Tax rates are determined by each state.
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  • Are church tithes tax deductible?

    Q: Are church tithes tax deductible?

    A: According to Publication 526 of the Internal Revenue Service, cash donations to religious organizations are tax-deductible. Examples given in the publication include "churches, a convention or association of churches, temples, synagogues, mosques and other religious organizations." Since tithes are monetary gifts to a church, they are not subject to taxation by the IRS.
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  • Can I claim my dog on my taxes?

    Q: Can I claim my dog on my taxes?

    A: People cannot claim their dogs as dependents on their federal income taxes. According to the Internal Revenue Service Publication 501, a dependent must have a valid tax identification number to be claimed.
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  • How far back can the IRS audit you?

    Q: How far back can the IRS audit you?

    A: As of 2014, the IRS can audit tax returns that have been filed within the past three years. However, if a substantial error is found, the agency can include additional years. In this case, an audit usually does not cover returns that date back further than the past six years.
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  • What is a 501(c)3?

    Q: What is a 501(c)3?

    A: The term "501(c)3" refers to the most common type of nonprofit organization recognized by the IRS. According to About.com, this category embraces such diverse entities as old-age homes, charity hospitals, schools, churches and the Red Cross, among others. These organizations are exempt from taxation, and donations to them are generally tax deductible.
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  • What is the hotel room tax in California?

    Q: What is the hotel room tax in California?

    A: The hotel room tax in California is 12 percent of the bill charged by the hotel owner. Known as Transient Occupancy Tax, it is the responsibility of the hotel owner to pay the tax to the state of California.
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  • How much is the import tax from China to the USA?

    Q: How much is the import tax from China to the USA?

    A: The import tax from China to the United States varies based on the product. For instance, the maximum amount of tariff for imported eel products is 16 percent, while the same maximum for imported zinc oxide is 5.5 percent.
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  • What is taxation?

    Q: What is taxation?

    A: Taxation is when governments require citizens to pay a certain amount of money to help fund public institutions. Taxes are used to pay for things like public education, welfare programs, transportation infrastructure, defense funds and libraries.
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  • Why do baby names in Sweden need tax agency approval?

    Q: Why do baby names in Sweden need tax agency approval?

    A: There are a couple of reasons why the Skatteverket, the Swedish tax agency, oversees the names Swedes give to their children. Their goals are to protect children from potentially confusing or offensive names and to prevent Swedes from naming their children after the Swedish royal family.
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  • What are energy tax credits?

    Q: What are energy tax credits?

    A: Energy tax credits are incentives to lower taxes for people who use alternative energy resources. These are authorized by the U.S. Congress. They work by reducing income tax owed by a dollar-for-dollar basis. In contrast, a tax deduction lowers the amount of income subject to tax.
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  • When was a former IRS Commissioner convicted of tax evasion?

    Q: When was a former IRS Commissioner convicted of tax evasion?

    A: In 1952, former IRS commissioner Joseph Nunan got in trouble for tax evasion. In an odd twist, his problems were not due to corruption or hypocrisy but a simple misunderstanding over $2,000. He won a bet on a presidential election and forgot to claim the winnings on his tax return.
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  • Why are taxes important?

    Q: Why are taxes important?

    A: The IRS indicates that taxes are vital to support the infrastructure that citizens rely on at the local, state and federal levels. Taxes support national defense programs, roadway construction, social service programs, public health and education. Without taxpayer support, many of these programs cannot exist.
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  • What is the difference between a flat tax and a fair tax?

    Q: What is the difference between a flat tax and a fair tax?

    A: According to About.com, a flat tax refers to a proposed income tax system in which everyone pays the same "flat" tax rate regardless of income level. Meanwhile, a fair tax refers to a proposal that seeks to tax money that is spent rather than money that is earned by establishing a national sales tax and abolishing federal income and corporate taxes. This latter idea is delineated on FairTax.org.
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  • What is the purpose of an audit?

    Q: What is the purpose of an audit?

    A: An audit is a process that the Internal Revenue Service uses to check that the numbers of an account correspond with the tax return. While the IRS chooses to audit those with suspicious activity on their returns, there are also audits on a random sample of people and companies.
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  • How does an IRS audit work?

    Q: How does an IRS audit work?

    A: During an IRS audit, a tax return is examined line-by-line to make sure that everything is in order and nothing unusual is listed. If a suspicious item is found, the auditor asks the taxpayer to explain or justify it. Depending on the results of the audit, additional taxes may be owed.
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  • What is "intangible tax"?

    Q: What is "intangible tax"?

    A: An intangible tax is a tax assessed by federal and state governments on assets of intangible value, such as goodwill, the value of a worker’s experience and/or knowledge, trade and franchise names, non-competitive agreements related to business mergers and acquisitions, trademarks and a company’s human capital. The Internal Revenue Service defines intangible assets as types of property that possess value but cannot be touched or seen.
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  • What is a tariff?

    Q: What is a tariff?

    A: According to Investopedia, a tariff is a tax imposed on goods and services imported from another country. This is a tool used by governments as a trade barrier.
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  • Which U.S. state has a belt buckle tax?

    Q: Which U.S. state has a belt buckle tax?

    A: Texas has a seemingly arbitrary law on the books that charges sales tax for some clothing items, such as belt buckles, but not for others, such as the belts themselves. This tax system applies to other things, such as rain boots, which are taxable, but not cowboy boots, which are exempt.
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  • How can you tell if the IRS received your tax return?

    Q: How can you tell if the IRS received your tax return?

    A: One simple way to see if the IRS has received your tax return, especially if you are anticipating a refund, is to use the IRS's special "Where's My Refund" tool. The IRS updates refund statuses every 24 hours.
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  • Which states have the highest income taxes?

    Q: Which states have the highest income taxes?

    A: In addition to paying a federal income tax, most Americans have to pay an annual state income tax. Some states have higher rates than others, with California topping the list in 2014. Other factors such as local property tax rates may influence how expensive it is to live in a particular state.
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  • What is estate tax?

    Q: What is estate tax?

    A: Estate tax is a federal or state tax on property that a person owns at death and is transferred to another person or entity through a will or through the state laws that govern the assets of people who die without a will, called intestacy laws. Everything a person owns at death, including cash, stock, real estate, insurance proceeds and business interests, comprises the person's estate.
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