Winning prizes is so much fun, but paying taxes on them is not. With the deadline for filing your 2011 tax returns just a week away this seemed like a good time to remind everyone that you must pay taxes on each and every prize you win. Always keep that in mind when determining which sweepstakes you want to enter. Trips can get especially expensive as sponsors throw in one of a kind events that you will be expected to pay taxes on. The 2012 Summer Olympics in London are a good example. On SweepsU.com we have several sweepstakes offering Olympic trips, among them are The Deck Pass 2012 London Olympic Games Sweepstakes ($25,000) and the Visa London 2012 Olympic Games Sweepstakes ($18,050). Depending on your income, you will be expected to pay between 25% to 33% of the prize value in taxes. As much as I would love to go to the Olympics, I just cannot afford the taxes on Deck Pass Sweepstakes. I will not be entering that one. However, I can afford to win the Visa London Sweepstakes because they are including over $5,000 in the prize package to help pay those taxes.
The moral of this blog: always read the rules thoroughly to make sure you can afford what you are entering to win.