Taxes on due on contest winnings

[Anonymous]

Totally random, but I was contacted today because I won the grand prize for a local drawing. The prize is valued at $20k. I live in Montgomery County MD, but the prize will be issued in Virginia. Roughly what percentage will be due for taxes?

If we decide to donate the prize to a local charity what are my tax implications/liabilities?

TIA!!

[Anonymous]

I believe it would be taxed as ordinary income. My game show winnings were.

[Anonymous]

Do you want the prize at a cost of $7,000?

[Anonymous]

You'll owe federal income tax at your highest marginal rate plus state tax. So, call it 32% or so.

Donating the entire amount to charity would require you to recognize the income and take a corresponding deduction. Assuming you itemize, you would probably owe no taxes as a result. If take the standard deduction you may owe something.

[Anonymous]

Anonymous wrote:Totally random, but I was contacted today because I won the grand prize for a local drawing. The prize is valued at $20k. I live in Montgomery County MD, but the prize will be issued in Virginia. Roughly what percentage will be due for taxes?

If we decide to donate the prize to a local charity what are my tax implications/liabilities?

TIA!!

Ensure that the prize value is supportable. Sometimes the value is less but whatever they out in your 1099misc will be the value for taxes.