Go for the Gold....and pay the IRS

[markem]

Originally Posted by Starscream

How are the winnings categorized? Is it considered earned income or prize winnings? Prize winnings is taxed higher than earned income I beleive. I'm an idiot when it comes to this subject, so anyone who knows feel free to correct me.

Don't know, Andy. My accountant has never asked if I had prize winnings (I haven't), so didn't know that there was such a category in the federal code. Have you had to pay a separate federal tax on prize winnings?

[Starscream]

Originally Posted by markem

Don't know, Andy. My accountant has never asked if I had prize winnings (I haven't), so didn't know that there was such a category in the federal code. Have you had to pay a separate federal tax on prize winnings?

I remember the IRS guy who won on Who Wants to be a Millionaire saying it was almost 50%.

I've heard from other people that prize money is taxed higher as it is a luxury. I've never won the lottery nor won on Jeopardy, so my statement is based on word of mouth alone.