money
 






 

Question by  bij (20)

What is the tax on cash prizes?

 
+7

Answer by  Chaneygirl (1755)

There is no flat amount. Cash prizes are taxed at your ordinary income rate. Include it on line 21 form 1040. Tax can vary from 10% to 35% depending on the prize amount and your other income. If your state has income tax, it would be taxable there as well.

 
+6

Answer by  Chaneygirl (1755)

Cash prizes are taxed at the same rate as your other income. If you are in the 15% bracket, then 15%. It may put you in a higher tax bracket.

 
+1

Answer by  naveensolanki (31)

it is same as for normal tax slabs. it should be tax free as prize is a great motivation to perform

 
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