• FreeAdvice has a new Terms of Service and Privacy Policy, effective May 25, 2018.
    By continuing to use this site, you are consenting to our Terms of Service and use of cookies.

Prize Tax

Accident - Bankruptcy - Criminal Law / DUI - Business - Consumer - Employment - Family - Immigration - Real Estate - Tax - Traffic - Wills   Please click a topic or scroll down for more.

BHAussie

Junior Member
What is the name of your state (only U.S. law)? NY

I'm after an estimate for the federal (and NY state if app.) tax rate that would apply where annual income for the year is under $10,000 with a prize (non-cash prize) value of $1.45million?

(i.e. is the tax rate at the top tier as if the income for the year was a total of $1.45m or is it at the current tax paid as you earn rate)

Also, would the IRS be open to a payment plan arrangement? Can they take into account the debtor's ability to pay and what period of time would they usually allow payment schedule in the above scenario (and would they consider reducing the total tax payable)?

Cheers
:)
 


strongbus

Member
Don't know bout NY. But the Fed IRS is going take the amount you going have to pay them for that money before you even see a cent of it.

See it all the time where I am when someone wins the state lotty you see a story in the paper or on the news saying they won x amount but after state and fed taxes taking out its only x amount that they get a check for.

Also have had a few co-workers at different jobs who have won like 10,000 or so get mad cause the prize put them into a higher tax braket then they would be in causing them to get less back then normal.

Suggestion for you put 20-30,000 in a bank account and don't tuch it till after you do taxs to see if you going owe any more or not.
 

LdiJ

Senior Member
Don't know bout NY. But the Fed IRS is going take the amount you going have to pay them for that money before you even see a cent of it.

See it all the time where I am when someone wins the state lotty you see a story in the paper or on the news saying they won x amount but after state and fed taxes taking out its only x amount that they get a check for.

Also have had a few co-workers at different jobs who have won like 10,000 or so get mad cause the prize put them into a higher tax braket then they would be in causing them to get less back then normal.

Suggestion for you put 20-30,000 in a bank account and don't tuch it till after you do taxs to see if you going owe any more or not.
Except that this is a non-cash prize therefore there will be no cash for the OP to "set aside". In addition, tax on 1.45 million would be significantly higher than 20-30k.

BHAussie, you really need to consult with a local tax professional, preferibly before you collect the prize.
 

Find the Right Lawyer for Your Legal Issue!

Fast, Free, and Confidential
data-ad-format="auto">
Top