If you live in a state that imposes income taxes, you may also be required to pay state taxes on your winnings. The exact amount will depend on your tax bracket, but you can expect to pay around 30% of the car’s value in taxes. When you win a car, the process for paying taxes will vary depending on the prize’s value and your country of residence.įor example, if you win a car worth $30,000 in the United States, you’ll need to pay federal taxes on the prize. And don’t forget the initial costs of registering your vehicle and street-legal, like tags, decals, and inspections.Īll of these factors can add up quickly, so it’s important to consider them before claiming your prize. You’ll also need to factor in insurance, gas, and maintenance costs. However, this is just the tip of the iceberg regarding the costs of owning a car. So if you win a $60,000 car, you can expect to pay around $20,000 in taxes.

How Much Will I Pay in Tax?Īs we mentioned above, taxes on winning a car are typically levied at fair market value. If you know you’re going on a game show, talk to your accountant in advance so you can make sure any winnings are actually worth your time. State taxes may also apply, depending on where you live. If the value of your prize is $600 or more, you will be required to pay federal taxes on the amount. In fact, the same rules apply to game show winnings as other types of contest winnings. Many folks don’t know that there is no such thing as a free lunch when it comes to winning items on a game show. Many people dream of going on to The Price is Right and winning a new car, maybe a new washer and dryer, or possibly even a luxurious vacation. Of course, tax laws are subject to change, so it’s always a good idea to consult with a tax professional before claiming your prize. Similarly, prizes worth more than $500 are taxable income in Canada. The US and Canada are slightly different.įor example, prizes valued at $600 or more are subject to federal taxes in the United States. The answer depends on the vehicle’s value and your country. You may be surprised at the bill you’re about to receive. Before driving off the lot, take a look at the fine print.

If you’re fortunate enough to win a car, you may wonder if you’ll have to pay taxes on your prize.

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