What would the taxes be if you won a $40,000 cash prize?

What would the taxes be if you won a $40,000 cash prize in a contest?

What would the taxes be if you won a $40,000 cash prize?
Income tax is withheld at a flat 25% rate from certain kinds of gambling winnings.





Gambling winnings of more than $5,000 from the following sources are subject to income tax withholding.





Any sweepstakes, wagering pool, or lottery.





Any other wager if the proceeds are at least 300 times the amount of the bet.





It does not matter whether your winnings are paid in cash, in property, or as an annuity. Winnings not paid in cash are taken into account at their fair market value.





Exception. Gambling winnings from bingo, keno, and slot machines are generally not subject to income tax withholding. However, you may need to provide the payer with a social security number to avoid withholding. See Backup withholding on gambling winnings, on this page. If you receive gambling winnings not subject to withholding, you may need to pay estimated tax.





If you do not pay enough tax through withholding or estimated tax, you may be subject to a penalty.





Form W-2G. If a payer withholds income tax from your gambling winnings, you should receive a Form W-2G, Certain Gambling Winnings, showing the amount you won and the amount withheld.





Report the tax withheld on Form 1040, line 64.
Reply:depends on your other income that year and what your state tax rate is - could be anywhere from 10% to 40% or more in taxes
Reply:14,000
Reply:might depend on the circumstances ...








if you had to appear on a program or show in order to win, this is probably self-employment income and goes on Schedule C to form 1040. Self-employment taxes may apply in addition to income taxes.





{Example: contestants on TV quiz shows and similar entertainment venues, whether the show actually airs or not, are performers and this would be self-employment income.}








if you were, in essence, gambling, the income goes on line 21, Other Income, on form 1040. see instructions on page 24 for form 1040.








without knowing your circumstances and other income, etc. the amount of the taxes due can not be estimated.
Reply:1/3