How much money does the government take out of online contest prize money?
Yeah, so I’m a filmmaker who enteres ALOT of online film competitions for money. I hear ALOT of the time that the amount that they say you can win is never the amount you get because they take taxes out. But I have NO IDEA how much money that is. Is there an online calculator for that or something? And when they DO take it out, do they give it back during tax return season?
The prize is taxed as ordinary income, and anything they withheld is shown as withholding on your tax return. It would be applied to the tax you owe, and if more was withheld for the year than your total tax, you’d get the extra refunded to you.
Money – Pink Floyd + Lyrics