Taxes on prizes or winnings

[taurus042176]

What is the name of your state? Florida

I would like to know the stipulations of taxes on winning prizes or money. If I were to win a car, could I sell it to pay the tax or is there a set time I can pay it in? Could I get a loan on the vehicle to pay for the tax? Thank you for your time.

FYI- I am also in the military and the prize comes from a sweepstakes run by and for the military.

 

[loku]

The value of prizes or amount of money you win is taxed the same as the money you earn. If the value of the prize is great enough, there should be tax withheld on it. If it is not that big, it could be big enough so that you would have to file estimated tax based on the amount of the prize. For material on estimated tax see IRS Publication 17, Your Federal Income Tax, which you can download for free at the IRS site at: http://www.irs.ustreas.gov/forms_pubs/index.html .

Whatever the value of the prize, it is income for the year you win it, and the return and payment of tax is due April 15, the following year.

Lastly, you certainly could take out a loan on the car to pay the tax.