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7 Answers

how much taxes will I have to pay to claim a prize worth $2500?

Asked by: megan 389 views YA Discussion

So how is taxes for prizes accounted for? Does the value of the prize go towards your income, or is it a fixed rate tax like a sales tax? It is for an item worth about $ 2500 and the company holding the contest has reported my award to the IRS.
Ok thank you to those that responded and I understand it’s basically based on my income and what bracket that will fall into. Basically I’m claiming it for someone who actually won it but is overseas and I will give to them, but I’m wondering if I should just tell them to pay me whatever taxes I think I will owe on it. Ex. 20% effective tax rate is what my turbo tax showed me, so maybe I could ask them for $ 500. Thanks again and please don’t spend too much time answering this.

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  • do you havs to pay taxes on 2500 dillar prize

7 Answers



  1. Wayne Z on Nov 08, 2012 Reply

    It depends upon what tax bracket you are in.

    If you are in the 15% bracket, it will cost you $ 375 in federal taxes. If you are in the 25%, it will cost you $ 625 and so on.

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    • eleanora neale on Dec 04, 2013 Reply

      So what if you want to pay before tax time on 2,500 win,wondering about how much please.

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  2. Uncommon Sense on Nov 08, 2012 Reply

    WAY too many variables.

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  3. Judy on Nov 08, 2012 Reply

    The prize is shown on your tax return as miscellaneous income.The payer might withhold some tax from the prize, in which case you’d show that on your return as withholding. If they tell you that you have to pay THEM to CLAIM the prize, sounds like a scam.

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  4. rtfm on Nov 08, 2012 Reply

    You don’t have to pay anything in order to CLAIM a prize. They’ll just send the prize to you. At the end of they year, they’ll send you a 1099 form which you will use when you file your regular tax return. If you’re in, say, the 10 percent bracket, then you’ll owe $ 250 in tax.

    If someone is telling you that you must give them the money for taxes up front before you can get your prize … then YOU ARE BEING SCAMMED.

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  5. Bobbie on Nov 08, 2012 Reply

    And this sure does sound like a SCAM to me so you really do need to be very careful before and make sure that you do get some thing of value in your hand before you do go and send some some amount of money out to some else for what ever reason they and you want to use for this purpose and time in you life.
    Hope that you find the above enclosed information useful. 11/07/2012

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  6. tro on Nov 08, 2012 Reply

    the prize is not taxed individually, it will depend entirely on how the $ 2500 impacts your other income

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