How Do I Pay Taxes On A Vehicle Prize Ive Won In California?
The Form 1099 value is what you’ll pay the tax on, both to the Feds and CA. You’ll show that amount on the “Other Income” line on your tax returns. It would probably be a good idea to make an estimated tax payment as soon as you sell it so you don’t pull up short on tax day. Use Form 1040-ES for the Federal tax. CA has a similar form, I don’t recall the number but you can get a copy on the FTB website. The amount of the payment would be based upon your marginal tax rate but 25% of the Form 1099 amount should be safe for most folks plus another 8% to CA. You won’t pay the dealer anything for registration fees or sales tax but you will pay those if you register the vehicle. You probably will have to register it in order to title it in your name in order to sell it so there may not be any way out of that. The sales tax will be whatever it is in your home city or county, up to around 8.25%. About the only thing you can use to minimize the tax burden is the cost of the raffle ticket. Congra
