How do you determine the taxes on a prize that you won?

Answer by  Chaneygirl (1755)

The prize will be taxed with your regular income on your return. If you know the tax bracket you are in, be sure that percentage is paid in.

Answer by  technogeek (6640)

The proper taxes depend on the amount of the prize. If it is really huge, then you will have to pay around 40%.

Answer by  Kurt (4579)

The prize will be included in your taxable income. You will probably receive a 1099 form for the amount of the prize. You should probably make an estimated tax deposit.

Answer by  tamarawilhite (17883)

You will pay income taxes on the award. Most states will require that they withhold a minimum 25% of the award for taxes. Depending on where you live, the amount you owe may actually be higher. You will owe state and federal income taxes on the amount, and possibly municipal income taxes.