Comments on: Prize Winnings Tax http://www.bargaineering.com/articles/prize-winnings-tax.html personal finance blog with anecdotes, advice and commentary. Sun, 08 Nov 2009 13:29:19 -0500 http://wordpress.org/?v=2.8.5 hourly 1 By: jim http://www.bargaineering.com/articles/prize-winnings-tax.html/comment-page-1#comment-293607 jim Wed, 17 Dec 2008 15:41:44 +0000 http://www.bargaineering.com/articles/?p=3762#comment-293607 The fact that some people are still tricked by these scams always surprises me, but sometimes greed outmuscles common sense. The fact that some people are still tricked by these scams always surprises me, but sometimes greed outmuscles common sense.

]]> By: cautious http://www.bargaineering.com/articles/prize-winnings-tax.html/comment-page-1#comment-293603 cautious Wed, 17 Dec 2008 15:21:14 +0000 http://www.bargaineering.com/articles/?p=3762#comment-293603 haha, I was hoping you'd say that. It didn't quite occur to me at first, obviously lol, but after I posted I realized that I wasn't familiar with your site so it was likely... Glad to hear it! haha, I was hoping you’d say that. It didn’t quite occur to me at first, obviously lol, but after I posted I realized that I wasn’t familiar with your site so it was likely… Glad to hear it!

]]> By: jim http://www.bargaineering.com/articles/prize-winnings-tax.html/comment-page-1#comment-293575 jim Tue, 16 Dec 2008 23:02:11 +0000 http://www.bargaineering.com/articles/?p=3762#comment-293575 cautious: I was just kidding around... cautious: I was just kidding around…

]]> By: cautious http://www.bargaineering.com/articles/prize-winnings-tax.html/comment-page-1#comment-293574 cautious Tue, 16 Dec 2008 22:47:18 +0000 http://www.bargaineering.com/articles/?p=3762#comment-293574 uhh...are you sure about this? Not the tax info but the lottery winnings you say you've received. There's been a Nigerian Scam going around for a while now. I received an email of a similar nature about a year ago. It seemed suspicious so I did some research and found a lot of scam information. Like I said, it was about a year ago so I don't remember all of the sources, but I'll look for them. Anyway, from what I do remember, they randomly choose email addresses, tell you you've won the Nigerian Lottery (or some other random way to receive a LOT of money) with a really good explanation as to how, then ask you for you bank info to transfer the funds when in reality they drain you of your funds... I would look into this a lot more before believing anything. You should always be aware of what you're winning. Check the email address that you received the notice from against lists of fraudulent ones that you can find on the internet. You can't win a prize for a contest you never entered and you should never pay for a prize before you receive it. Like you said, you'll pay taxes on it, but that's all you should pay. You should never be asked to pay the distributors of the prize itself. That's a bad sign. I'll look for that website and post it if I find it soon. Good luck! And sorry, I don't mean to damper things. I'd be thrilled if this was for real, but it just seems a bit sketh and I want you to be cautious. There are few things worse than getting scammed. uhh…are you sure about this? Not the tax info but the lottery winnings you say you’ve received. There’s been a Nigerian Scam going around for a while now. I received an email of a similar nature about a year ago. It seemed suspicious so I did some research and found a lot of scam information. Like I said, it was about a year ago so I don’t remember all of the sources, but I’ll look for them.

Anyway, from what I do remember, they randomly choose email addresses, tell you you’ve won the Nigerian Lottery (or some other random way to receive a LOT of money) with a really good explanation as to how, then ask you for you bank info to transfer the funds when in reality they drain you of your funds… I would look into this a lot more before believing anything.

You should always be aware of what you’re winning. Check the email address that you received the notice from against lists of fraudulent ones that you can find on the internet. You can’t win a prize for a contest you never entered and you should never pay for a prize before you receive it. Like you said, you’ll pay taxes on it, but that’s all you should pay. You should never be asked to pay the distributors of the prize itself. That’s a bad sign.

I’ll look for that website and post it if I find it soon. Good luck! And sorry, I don’t mean to damper things. I’d be thrilled if this was for real, but it just seems a bit sketh and I want you to be cautious. There are few things worse than getting scammed.

]]> By: jim http://www.bargaineering.com/articles/prize-winnings-tax.html/comment-page-1#comment-292779 jim Wed, 03 Dec 2008 15:36:54 +0000 http://www.bargaineering.com/articles/?p=3762#comment-292779 Keith - true, but sometimes you win something you can buy for $50 but the contest says it's valued at $250... you get taxed at $250 on something that isn't worth the tax! Plus, it's good ot know how things work... it's not necessarily "quibbling" just because you want to understand. Keith – true, but sometimes you win something you can buy for $50 but the contest says it’s valued at $250… you get taxed at $250 on something that isn’t worth the tax!

Plus, it’s good ot know how things work… it’s not necessarily “quibbling” just because you want to understand.

]]> By: Keith http://www.bargaineering.com/articles/prize-winnings-tax.html/comment-page-1#comment-292775 Keith Wed, 03 Dec 2008 14:50:58 +0000 http://www.bargaineering.com/articles/?p=3762#comment-292775 Taxes asside, you are still coming into a wind fall. Why quibble over peanuts when you win the farm! Taxes asside, you are still coming into a wind fall. Why quibble over peanuts when you win the farm!

]]> By: poo boomer http://www.bargaineering.com/articles/prize-winnings-tax.html/comment-page-1#comment-292735 poo boomer Tue, 02 Dec 2008 19:41:00 +0000 http://www.bargaineering.com/articles/?p=3762#comment-292735 Prize valuations are based on list price, which is grossly inflated far above street price which is what people actually pay to buy the stuff. Prize valuations are based on list price, which is grossly inflated far above street price which is what people actually pay to buy the stuff.

]]> By: Ken Montville - The MD Suburbs of DC http://www.bargaineering.com/articles/prize-winnings-tax.html/comment-page-1#comment-292703 Ken Montville - The MD Suburbs of DC Tue, 02 Dec 2008 03:00:22 +0000 http://www.bargaineering.com/articles/?p=3762#comment-292703 Believe it or not, my State lottery - a legitimate gambling endeavor for which you must "play to win" - has a little tax page with a link kinda hidden but kinda not on the Maryland Lottery home page. They break it down as follows: "For prize payments over $5,000 taxes will be withheld as follows: 25.0% Federal Tax 8.5% State tax (Maryland residents) 6.75% State Tax (non-Maryland residents)" ...and then provide links to all kinds of informative sites. The bottom line is that while it would be nice to grab it <i>all</i> I would gladly pay the 33.5% to get my hands on the remaining 66.5% of the money. Especially if my initial outlay is only a buck or two. :-) Believe it or not, my State lottery – a legitimate gambling endeavor for which you must “play to win” – has a little tax page with a link kinda hidden but kinda not on the Maryland Lottery home page. They break it down as follows:

“For prize payments over $5,000 taxes will be withheld as follows:
25.0% Federal Tax
8.5% State tax (Maryland residents)
6.75% State Tax (non-Maryland residents)”

…and then provide links to all kinds of informative sites. The bottom line is that while it would be nice to grab it all I would gladly pay the 33.5% to get my hands on the remaining 66.5% of the money. Especially if my initial outlay is only a buck or two. :-)

]]> By: Patrick http://www.bargaineering.com/articles/prize-winnings-tax.html/comment-page-1#comment-292701 Patrick Tue, 02 Dec 2008 02:25:13 +0000 http://www.bargaineering.com/articles/?p=3762#comment-292701 It really sucks that you win a huge prize and you have to pay so much tax on it. I would rather just get cash instead of a prize because then I could buy whatever I want. My company gives out bonuses of money, but they give them in $100 gift checks instead of the full amount. Sucks to have to cash all of them, but they do cover the taxes for us :) It really sucks that you win a huge prize and you have to pay so much tax on it. I would rather just get cash instead of a prize because then I could buy whatever I want. My company gives out bonuses of money, but they give them in $100 gift checks instead of the full amount. Sucks to have to cash all of them, but they do cover the taxes for us :)

]]> By: PennySeeds.com http://www.bargaineering.com/articles/prize-winnings-tax.html/comment-page-1#comment-292693 PennySeeds.com Mon, 01 Dec 2008 21:43:35 +0000 http://www.bargaineering.com/articles/?p=3762#comment-292693 Ah, yes! I used to win the British lottery every day the lucky person that I am. I don't win much in the way of real contests, but I have gotten a couple meager prizes. I once one $50 via Paypal from a company's newsletter content, some CDs, and a $250 gift card from Hot Topic as well. Traciatim - Seems like Canada has all the fun.. just too darn cold for us Floridians to move there! Ah, yes! I used to win the British lottery every day the lucky person that I am. I don’t win much in the way of real contests, but I have gotten a couple meager prizes.

I once one $50 via Paypal from a company’s newsletter content, some CDs, and a $250 gift card from Hot Topic as well.

Traciatim – Seems like Canada has all the fun.. just too darn cold for us Floridians to move there!

]]> By: Eric N. http://www.bargaineering.com/articles/prize-winnings-tax.html/comment-page-1#comment-292690 Eric N. Mon, 01 Dec 2008 20:47:26 +0000 http://www.bargaineering.com/articles/?p=3762#comment-292690 lol get in line Jim! I got that same email yesterday ;) lol get in line Jim!

I got that same email yesterday ;)

]]> By: jim http://www.bargaineering.com/articles/prize-winnings-tax.html/comment-page-1#comment-292685 jim Mon, 01 Dec 2008 19:09:06 +0000 http://www.bargaineering.com/articles/?p=3762#comment-292685 @Greg: The lump sum is less because it's discounted, they're taking a cash flow over 20 years and accelerating it. You get the same "value" assuming the interest rate they use matches reality. @Greg: The lump sum is less because it’s discounted, they’re taking a cash flow over 20 years and accelerating it. You get the same “value” assuming the interest rate they use matches reality.

]]> By: Traciatim http://www.bargaineering.com/articles/prize-winnings-tax.html/comment-page-1#comment-292683 Traciatim Mon, 01 Dec 2008 18:15:00 +0000 http://www.bargaineering.com/articles/?p=3762#comment-292683 Another simple answer to this is to move to Canada, no tax on winnings here. Plus if you have a heart attack from the shock of winning, no bill for that either. Another simple answer to this is to move to Canada, no tax on winnings here. Plus if you have a heart attack from the shock of winning, no bill for that either.

]]> By: Greg http://www.bargaineering.com/articles/prize-winnings-tax.html/comment-page-1#comment-292682 Greg Mon, 01 Dec 2008 18:09:59 +0000 http://www.bargaineering.com/articles/?p=3762#comment-292682 This probably stems from the lotteries that give you the option of a lump sum or an annual payment over 20 years. The lump sum is significantly less. This probably stems from the lotteries that give you the option of a lump sum or an annual payment over 20 years. The lump sum is significantly less.

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