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What Happens When You Win 'The Price Is Right'

We've all dreamed of winning it big -- whether it's the Powerball lottery or a popular gameshow. But the sudden euphoria that erupts after learning you've won millions of dollars, a new car or a brand new dining room set can quickly turn into a headache went it comes to collecting your prize.

Just ask Andrea Schwartz, who appeared on "The Price Is Right" last year. "It was a nerve-wracking experience, and I've never been more embarrassed watching myself of television," Schwartz told the A.V. Club website.

In the end, she walked away with $1,200, a Mazda 2 subcompact, a pool table, a shuffleboard table and some earrings -- $33,000 worth of prizes in all. But as A.V. Club reports, there was a lot of red tape involved in getting those prizes home.

"You don't just drive off the backlot with the car like I thought the entire time I was growing up," she said. Rather, contestants fill out paperwork that notes that they agree to pay taxes on the prizes they won. Depending on where you live, you may be on the hook for state taxes in addition to federal taxes on the value of the merchandise and any cash you might've won.

For more on Schwartz's experience, and the ins and outs involved in being a prize winner, read the rest of the A.V. Club's Q&A with the big winner.

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TurboTax Articles

Cities with the Lowest Tax Rates

The total amount of tax you pay reaches far beyond what you owe the federal government. Depending on where you live, most likely you're required to pay additional taxes, including property and sales tax. The disparity between the amount of tax you pay in a low-tax city and that in a high-tax city can be dramatic. Living in any of these 10 cities could save you a bundle, although the exact amount may fluctuate based on your income and lifestyle choices.

Cities with the Highest Tax Rates

Much ado is made in the press about federal tax brackets, but cities can carry a tax bite of their own. Even if you live in a state that has no income tax, your city may levy a variety of taxes that could eat away the entire benefit of living in an income tax-free state, including property taxes, sales taxes and auto taxes. Consider all the costs before you move to one of these cities, and understand that rates may change based on your family's income level.

Great Ways to Get Charitable Tax Deductions

Generally, when you give money to a charity, you can use the amount of that donation as a deduction on your tax return. However, not all charities qualify as tax-deductible organizations. While there are many types of charities, they must all meet certain criteria to be classified by the IRS as tax-deductible organizations. There are legitimate tax-deductible organizations in many popular categories, such as those listed below.

A Freelancer's Guide to Taxes

Freelancing certainly has its benefits, but it can result in a few complications come tax time. The Internal Revenue Service considers freelancers to be self-employed, so if you earn income as a freelancer you must file your taxes as a business owner. While you can take additional deductions if you are self-employed, you'll also face additional taxes in the form of the self-employment tax. Here are things to consider as a freelancer when filing your taxes.

Tax Deductions for Voluntary Interest Payments on Student Loans

Most taxpayers who pay interest on student loans can take a tax deduction for the expense ? and you can do this regardless of whether you itemize tax deductions on your return. The rules for claiming the deduction are the same whether the interest payments were required or voluntary.

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Brian Sleider

This just in, You are taxed on contest winnings more on this and other non news at 11.

August 21 2013 at 8:12 PM Report abuse rate up rate down Reply

Geez, take it or leave it. Seems like a waste when there are people who wouldn't mind buying those things for just the tax amount. She's part of the middle class in which you make payments with interest on things for much more than they're worth and rarely end up owning them. Why? Because people refuse to sacrifice by saving up and actually paying less for things. They only ever have enough to cover a payment.

August 19 2013 at 2:31 AM Report abuse rate up rate down Reply
John Lutz

Y E PPPPPPP.......

August 19 2013 at 2:15 AM Report abuse rate up rate down Reply

The game shows should give the contestants the money to pay the taxes on the prizes. Even if they have to give out less expensive prizes in order to do that. They can advertise that the contestants receive the prizes with all taxes paid.

August 19 2013 at 1:19 AM Report abuse +1 rate up rate down Reply
2 replies to Sunny's comment

Problem here is.... That $$$'s paying the taxes then itself hbecomes a won gift, and you'd owe taxes on IT!
The only way out would be...
Say the tax on a car won came to $2,000. They'd have to give you something like $2500 extra. ( $2,000 to cover the car tax, plus $500 more to cover tax on the now $2500 bonus "gift" . )
If they just gave you $2,000 for car tax, you'd owe the IRS tax on the $2,000 "Income."

August 20 2013 at 1:30 PM Report abuse rate up rate down Reply

some of the prizes I could not use any way like a trip I would not want or a yard furniture, I would not go on it any way

August 01 2014 at 3:29 PM Report abuse +1 rate up rate down Reply

Isn't it just a "LOVELY COUNTRY" we live in?? Not only are they trying to take away the food stamps from children, elderly, and disabled, .....they tax the he!! out of you for winning prizes on a game show, or if you manage to scrape up $2 for a lottery and win, they take over half the money "YOU" won!! Other countries don't do this,......why does the U.S.??!
Never fear though folks, your fearless leader will continue to send weapons, and a couple billion dollars to Egypt so they can continue to kill each other, and children and old people can starve to death here!!!!!!!!!!!

August 19 2013 at 1:07 AM Report abuse +2 rate up rate down Reply
1 reply to metusmetu's comment

You're free to leave.

August 19 2013 at 1:14 AM Report abuse +2 rate up rate down Reply
1 reply to bobravv's comment

YOU leave. You're the one supporting all this nonsense. Spying on American citizens without a warrant, blowing up American teenagers without even bothering to go to court first, spending trillions we don't have, enslaving our grandchildren to insane levels of debt--this is on you and people like you. So no, YOU leave. Stop trying to steal freedom and prosperity from the rest of us.

August 19 2013 at 1:26 AM Report abuse -2 rate up rate down
Janet Nicholas

Yep, I stopped watching maybe 17 years ago. But, I held on to Comcast for 12ish more years before I said this is stupid. I actually had Cable for 7 more years for free because they said it was too much trouble to turn off, until the end of June this year. Do I miss you, or the bill? Um, NO!

August 19 2013 at 12:49 AM Report abuse rate up rate down Reply

as far as this story goes-----duh

August 19 2013 at 12:34 AM Report abuse rate up rate down Reply

Just another example of this government stealing every bit they can. Our government is now more like a crack head than a governing body. They make rules for everybody else, except themselves, tax everything including death and then try over and over again to steal the rest. This government is out of control and needs to be stopped! By any and all means before they drive this country off he cliff.

August 19 2013 at 12:16 AM Report abuse +2 rate up rate down Reply
1 reply to danielsdad619's comment

Unfortunately I think it is too late! Unless the people of the U.S. mount a huge Civil War against the ............well, you know who..

August 19 2013 at 1:11 AM Report abuse -1 rate up rate down Reply

It's called "Win" to "Lose"

August 19 2013 at 12:07 AM Report abuse +1 rate up rate down Reply

...and what moron didnt know this..?

August 18 2013 at 11:54 PM Report abuse rate up rate down Reply
1 reply to leftydap52's comment

Tell us, oh mighty Guru,........what other great and wonderful things can you impart to us lowly beings,............we're not worthy of such a great and wonderful mind such as yours!!

August 19 2013 at 1:13 AM Report abuse +1 rate up rate down Reply