If you won prizes or money on a game show?

Question

Say you won a car or 200,000. dollars what do you have to pay in fees or taxes and would this really screw up your Tax return for that year?

Answer 1

Winning cash isn't going to screw up your return. You will add the cash to your income, and pay some of the cash prize in taxes. If the cash prize is large, of course a large part of it will go to taxes.

If you win a car, then the tax treatment of it is exactly if you earned enough money to buy that car. In other words, the value of the car is added to your income, and you will pay income taxes on that value. If it is a car you want and can afford to keep, the taxes are worth paying.

When a person wins an expensive prize that they would not have purchased with their own money, or a prize that they do not want and cannot sell, such as an expensive trip, then they are in a bad position tax-wise. The will have to pay income taxes on the fair market value and may not have the cash available to pay.

Answer 2

There is a big difference between a car and $200,000, take your pick. The winnings, as declared by the game show, not you will be added on to your total income. The tax answer is yes, it could totally blow you out of the water. It is possible that you would have to sell your car, or other winnings for a loss just to pay your taxes. You could actually end up in the hole for being a winner, or in this case a loosing winner. If you have a choice take your winnings in cash. That amount can't be inflated or deflated and it hard to take a loss on cash.

Answer 3

You'd pay taxes on the amount you won - if a prize, on the fair market value - at whatever your tax rate is for the year. That amount would just be added to the rest of your income on your tax return, and your tax calculated based on the total. So for that year yes, you'd pay extra tax, which could be significant if the prize is large.

Answer 4

You'll pay taxes on the value of the prize. Cash is pretty easy. For merchandise prizes, the show's producers will determine the value and that's what you'll pay taxes on.

Many prize winners wind up selling their prizes to pay the taxes and more than one has refused the prize once they saw what the tax consequences were and the what the hassles and expense of paying the taxes were.

Answer 5

taxes... that happened when oprah gave out all those cars on her show, the people got the cars, but they had to pay their homestate taxes on them when they got them home.