Taxes

In the majority of cases, you should never pay taxes directly to the sweepstakes sponsor. If a sweepstakes sponsor asks for money for taxes before sending a prize is a clear sign of sweepstakes fraud. A REAL win will not require any payment. Your taxes on your prizes won will be something that you discus with your tax preparer. You will claim them on your tax forms similar to how you would claim income.

The exceptions to this rule would be a vacation sweepstakes and or a car sweepstakes, in these cases the taxes are paid upfront.

Vacation Sweepstakes will sometimes collect the hotel, airport, and port fees upfront.

With a car sweepstakes it would be similar to when you purchase a car;Tax Title and License maybe be fees that you would be responsible for. Many sweepstakes will state in their Official rules if they cover these expenses so be sure to skim over the rules of all sweepstakes you enter.