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In the United States, any and all sweepstakes winners are required to pay taxes on their prizes. While we are not accountants, we have learned a lot about sweepstakes and taxes over the years that we\u2019ve been entering and winning. We want to make sure you are prepared and doing your due diligence when and if you win in the United States. So here are the 4 most important things every sweeper needs to know about sweepstakes taxes ( if you live<\/a> in the U.S.):<\/p>\n 1. All Your Prizes are Treated Like Income, Yes, INCOME<\/strong> It\u2019s worthwhile considering whether you\u2019re willing and able to pay the taxes on the prizes before you enter sweepstakes<\/a>. For instance, if you were to go on a game show on television and win<\/a> a car, do you know that you are liable for the tax and license on that car? So while you might think that you won a whole car you have really won a car and a bill for tax and license. The only exception would be if in the rules it states clearly that the prize includes the \u201ctax and license fees in the winner's state.\u201d 2. There Is No Minimum on the Prize Value. You Need to Declare it all!<\/strong><\/p>
\nWe know, it does not not seem fair, but you should treat the value of your sweepstakes prizes as if you had been paid the amount of the prize value by an employer. Now we know that there\u2019s a big difference between winning<\/a> a fancy ,000 vacation and having an extra ,000 in your paycheck at the end of the month, but the IRS treats both cases similarly and that is important to know.<\/p>\n
\nFor more information about how you declare your prizes, see Paying Your Sweepstakes Taxes.<\/p>\n\r\n