Taxes Taxes
Winning means you’ll owe federal and state income taxes, and winning more can place you in a higher tax bracket. As an example, a married couple making $135,000 who wins $10,000 will result to their federal rate increasing by 3%, padding their tax bill with an extra $231. As for the state tax bill, winners must file a return where they won, then claim the taxes paid as a credit in their home state. If the winner’s home state has a lower tax rate, he won’t get back the difference. So never think that contestants are able to bring home the actual amount that they’d won.
