2006-06-17 10:19:57 · 11 answers · asked by anyang2 2 in Business & Finance ➔ Taxes ➔ United States
If the prize is under $600, it's generally not reported as income. If it's over $600, you're taxed at your marginal tax rate, whatever rate that is...same as wages or other earnings.
Make sure that the value that is reflected is the true value of the prize, and if it is more, you can dispute. For instance, if you win a plane trip to New York and they try to say the prize is worth $2,000, you should price the same trip and print out the true value, then you can contest the amount (of course, it increases the chance you'll get audited, so be careful).
2006-06-17 10:27:38 · answer #1 · answered by bruindon 2 · 4⤊ 0⤋
To figure out winnings there is basically a table, and it depends on how much you win and what method of payment you choose to take. A lump sum payment (if you win the lottery) has the biggest chunk taken out, however if you do annuity payments you will receive more in the long run and can actually make it to where there are less taxes taken out. Here's a link to an old irs pdf. file on "Winnings". Anything under $500 you don't report to the IRS, anything above that they fill out an irs form!
2006-06-17 10:29:35 · answer #2 · answered by asianbbwinokc 2 · 1⤊ 0⤋
You will have to use a W-2G form for filing any winnings or sweepstakes. It is 28% tax that is taken right off the top of your winnings for Pa.
(speaking from experience as to how much they take)
I believe each state has their own % that is deducted.
2006-06-17 10:31:55 · answer #3 · answered by flobee_55 1 · 0⤊ 0⤋
The payer should provide you with a 1099 MISC by February 28th of the year after the year in which you won the prize. Where you report the income depends on which box the payer uses to report the payment. For example, if the $2500 is in Box 3 the income would be reported as ordinary income on line 21 of your 1040 form, Write the word "prize" on the blank space to the left of the money column. If the payment was placed in box 3 you would need to report it on a schedule 3 which would flow through to line 12 of the 1040 form.
2016-03-27 19:11:49 · answer #4 · answered by Anonymous · 0⤊ 0⤋
It is according to what state you're in when you win the prize or sweepstakes.
The IRS has a booklet for the formula to figure your taxes.
Just call them and ask
I know that the State of Mississippi, it is 33.5%
2006-06-17 10:24:38 · answer #5 · answered by Alfredia W 1 · 1⤊ 0⤋
For the state tax - it depends on the state. For federal tax it depends on how much other income you have as it could put you into a higher tax bracket or force you into the alternative minimum tax which makes you pay a lot more.
2006-06-17 10:25:44 · answer #6 · answered by smgray99 7 · 1⤊ 0⤋
Did you win one yet. I figure you should concentrate on winning for now and worry about the taxes later.
2006-06-17 13:15:43 · answer #7 · answered by Bantree 4 · 0⤊ 0⤋
First you have consider the taxes in your state and also in the state the winning ticket was brought in. what ever the percentage is for those states is how you would estimate of what their percentage should be divide
2006-06-17 10:28:26 · answer #8 · answered by latunial 1 · 1⤊ 0⤋
The answer is the IRS gets one-third of all winnings. Sorry!
2006-06-17 10:31:19 · answer #9 · answered by Andi 2 · 0⤊ 0⤋
don't worry Uncle Sam knows that answer...
2006-06-18 03:54:15 · answer #10 · answered by Linnie 5 · 0⤊ 0⤋