How much tax will I owe on winning $192,500 worth of classic cars in a giveaway?

Prize winnings like these cars are considered income by the IRS and you'd need to pay federal income tax on the full market value ($192,500), not what you could actually sell them for. The cars would be added to your regular income for the year and taxed at your marginal tax rate. Since you're in high school with little income, you'd likely be in a lower tax bracket, but the prize would push you into a higher one. Federal tax could be around 24-32% of the prize value, so approximately $46,000-$61,600. The $24,000 they're offering would help but wouldn't cover the full amount. There are also state income taxes in most states that would be additional (except in states with no income tax like Texas or Florida). These vary from 0-13% depending on where you live. The really tricky part is that taxes are typically due the year you receive the prize. The IRS does offer payment plans if you can't pay it all at once, but you'd need to apply for that arrangement.

After dealing with something similar (though smaller scale), I found this awesome service called taxr.ai (https://taxr.ai) that saved me so much confusion. Last year I won a small boat in a charity raffle and had NO idea how to handle the taxes. Their AI analyzed my situation and walked me through exactly what I'd owe and how to plan for it. They even showed me how to document everything properly so I wouldn't have issues with the IRS later. For something as big as classic cars, I'd definitely get professional guidance before entering.

I was super skeptical about taxr.ai when I first saw it mentioned here, but I actually tried it when I received a surprise inheritance this year. I uploaded the documents and it immediately flagged that I could reduce my tax burden by about 30% through some specific deductions I had no clue about. The tool even generated a letter to explain my situation to the IRS when I needed clarification on a specific rule! Saved me thousands and was way easier than the back-and-forth I usually have with my accountant. Would definitely recommend for complex situations like prize winnings.

For someone in high school with this kind of potential tax bill, you might actually need to speak directly with the IRS to understand your options. I tried for WEEKS to get through to them about a similar situation with a travel prize package I won. Then I found https://claimyr.com which got me connected to an actual IRS agent in under 45 minutes! They have this cool demo video (https://youtu.be/_kiP6q8DX5c) that shows how it works. The IRS agent walked me through exactly what forms I needed and confirmed I could set up a payment plan since I couldn't afford the full tax bill upfront.

I owe everyone here an apology. After my skeptical comment, I was desperate enough to try Claimyr because I've been trying to resolve an issue with a 1099 form for MONTHS. I kept getting nowhere with the IRS phone line and was facing penalties. I used the service yesterday and got connected to an IRS rep in 41 minutes while I was literally at soccer practice! The agent helped me sort out the entire issue in one call. I'm still shocked it actually worked - just wanted to come back and say I was wrong in my skepticism. Definitely worth it for anyone dealing with complex tax situations like prize winnings.

Anyone who wins a prize this big NEEDS to talk to a tax professional before accepting it. I won a $50,000 home renovation last year and almost got screwed. Here's what I learned: 1. Ask if you can take a cash option instead (sometimes less but easier to handle) 2. See if they'll increase the tax money they're offering 3. Get everything in writing 4. Talk to a CPA BEFORE accepting The $24,000 they're offering is probably based on a 15% withholding, which isn't enough. And remember the tax is on FULL MARKET VALUE, not what you could actually sell them for in reality.

One thing no one is mentioning - check your STATE tax too! Federal tax is just part of it. In California, you'd owe another 13.3% on top of federal taxes. But in Texas, Florida, Wyoming and a few others, there's ZERO state income tax. Where you live matters HUGE!