what is the percentage paid for prizes on income tax, and is there a deduction to use in addition to it?

Answer 1

You report it when you file taxes for the year that you won, and pay income tax on the amount as ordinary income - the percent would vary depending on the amount of your total taxable income including the prize. Taxes might be withheld, at a higher or lower amount than you actually end up owing, but you'd either get the extra refunded, or pay the balance, when you file your return.

About the only deduction would be that if it was gambling income, you might be able to deduct gambling losses up to the amount of the win if you itemize. There are very specific record-keeping requirements you have to have followed in order to take the losses as a deduction.

Answer 2

0% Income and property tax. There should be a fair tax, which is essentially a sales tax on everything you buy. It makes goods more expensive up front, but then everyone is taxed proportionally (the wealthy consume more than the poor) and we cut out the IRS (an unnecessary waste of funds). If we got rid of medicare and social security, we wouldn't need so much funding... I'm in college, pay my own tuition, and make $8/hr and the government takes 20% of each of my paychecks for medicare and social security, which are services I will never get to use. I don't appreciate paying for someone else's grandparents when the system will go bankrupt soon because there are 3 baby boomers for every millenial.

Answer 3

There is no deduction for prizes. It is taxed at your income rate depending on how much you made. maximum is 28% minimum is 10%. However, if there prices came from your employer, they will be free from taxes if they did not exceed $1600 and the employer can deduct them as a business expense.