Reduce the Pain of Paying Taxes on Car Wins

If you do an online search for the phrase "win a car," one of the top results is a blog post on Wynia.org from last year, called Why You Don't Want to Win a Car as a Prize: Understanding the Scam. In summary, the author, J. Wynia, warns that people really shouldn't want to win car sweepstakes because the tax burden on these high-value prizes is too severe. While it's true that we Americans should always consider the taxes we'll have to pay on the prizes before entering a sweep or accepting a prize (lucky Canadians are exempt from paying sweepstakes taxes!), I still strongly disagree with J. Wynia. I think that a car is one of the most fun and profitable sweepstakes prizes.

Paying taxes on a car win is not cheap, but it can be done without breaking the bank. To show you how, I've put together a list of some of the top ways to make paying taxes on car wins affordable. These tips will help car winners deal with their taxes without having to turn down their prize.

By the way, J. Wynia states that most contests make you promise to hold off on selling a car prize for at least a year to reduce the chances of getting bad PR from follow-up newspaper articles. In my experience, that is not generally the case. I have heard several winners talk about how they sold their car prizes before leaving the lot, and I read through the rules of a bunch of different car sweepstakes today and saw no mention of such a condition. So while it might happen occasionally, I would not say that not being able to sell the car is standard. In any case, there are plenty of good options for reducing the burden of car taxes without resorting to selling the car.

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