Tip: Consider Sweepstakes Taxes Before Entering to Win

In the United States, sweepstakes prizes are subject to taxation, just like any other kind of income. (For more information, see How to Pay Your Sweepstakes Taxes)

Therefore, it makes sense for US residents to think about whether the taxes are worthwhile before entering to win or accepting prizes.

Before deciding whether or not to submit an entry for sweepstakes, ask yourself these questions:

• Would I really enjoy the prize?
• Would it make a great gift for a loved one?
• If I saw the prize offered in a store for a 70% discount, would I buy it?

If you can't answer yes to these questions, you should move on to the next sweepstakes.

By taking a moment to consider whether the prize is worth the taxes, you can spend more time concentrating on the sweepstakes you really want to win, keep your tax burden low, and save the sponsors the wasted effort of contacting a winner who doesn't want their prize.