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Answered 2008-06-05 03:38:48

Winnings on Game Shows, or anyplace (Lotteries and Casinos come to mind quickly), as is any form of income, including the finding of a "hord', are taxable. The givor must provide a 1099 report tot the IRS of the value of what was given or won, (above certain minor exclusions). Just like when Oprah gave away a car to each in her audience, each of whom had to include the value of the car as income and pay tax. You may recall she then agreed to pay the tax for them. What she paid for them is also taxable. (The calculation that is done to determine how much she needed to give them is called a "gross up". Where a determination is made of how much the amount provided actually has to be to basically cover all the rather circular naure of what is happening. So if a 20% rate is considered the recepients tax rat for the $100 given, you don't just give $120 but more like $124.44. The recepient ends up with the $100 net). I would also refer to the first Survivior winner, who failed to pay, even claiming the show promised to, and is now in jail for several years for having done so. How much is withheld and how much the recepient finally pays can, and usually does, vary. A recepient may be able to have nothing withheld by qualifying and providing a Form W-9 statement. Mandatory withholding, done by the givor is usually at 20%, under the recepients ID number and shown on a 1099 sent to the recepient. The amount withheld is then considered paid toward any tax the recepient would owe from all sources that year, which may be more or less than the amount actually withheld depending on many things - number and amounts of deductions, amounts of other income, etc. It is basically their own tax rate. Even if withholding wasn't done, the recepient would have to make a quarterly estimated payment, just like anyone who has income that isn't shown on a Form W-2 (where the withholding is done automatically by the employer), or be subject to penalties and interest.

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Answered 2020-09-30 16:26:14

How much taxes is taken from the winning s

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what is the tax on lottery winnings?

what is the tax on lottery winnings


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