Do you have to pay taxes on sweepstakes winnings? Yes, you are required to report and pay taxes on any winnings from sweepstakes, contests, or lotteries. The Internal Revenue Service treats these winnings as taxable income, meaning they must be included in your annual tax return. The amount you owe will depend on your total income and the size of the winnings. Additionally, if you receive a large prize, the organization may withhold a portion for taxes before you receive your winnings. It is crucial to keep accurate records of your winnings and consult a tax professional for guidance.
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