declining small prizes because of tax fear?

cancersucks

cancersucks

New member
So after a few short months of sweeping, i was lucky enough to win a trip. I am so excited, but knowing i have to pay taxes on that is almost detering me from winning other prizes. First I won a lunchables IW rv of $29.99 (awsome for christmas) then I won a video game prize worth $120, but it was for a system I dont have. I figured I could sell them or trade them for christmas presents and still come out ahead, but I have this nagging fear that i am going to be screwed @ tax time if I keep excepting these "smaller" prizes. Anyone care to share their tax burden on small (under $600) wins adding up? That might help ease my fear! ( or maybe not lol!) Am I being silly? Thanks! :crazytongue:
 
yes, you should declare, but if it is under 600 you dont have to, however it should be reported and tax paid
 
IRS regulations require that all winnings be reported and taxes paid. I think the reality is that very few people pay 'em. It's sorta like paying State sales tax on Amazon.com purchases. Most people won't do it unless there's an effective enforcement mechanism.

Winning over $600 will generate a 1099 from the Sweepstakes with a copy to the IRS. You really don't have a choice with winnings of $600 or more. :cry:
 
Wolfie said:
I'm not exactly sure what you are asking, but the IRS doesn't take anything out.

If you are wondering what your tax liability is, it depends on your tax bracket. Some can have a large win with very little taxes owed on it. Other's can owe quite a bit on the same win. I would consult your tax professional for info on a specific win.

Good luck
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Thank you guys for the responses. I did do a search on it and read what I could, but I am just curious what others experiences have been. It is such a wonderful feeling to win, and a part of me feels like the "too good to be true" aspect of winning is going to come back and haunt me or something. I guess it is just new and unfirmilar territory, and when the IRS is involved, its a bit intimidating in a way. But thank you for the responses!
 
cancersucks - I figure on a 1/3'd hit {like I do with gambling winnings} so $1,000 on a $3,000 win, but it's usually closer to the 15% bracket that we are in. Also, most of the time it just reduces our refund. I only had to pay on my 2 biggies {$4,000 & $10,000} and it was under $1,000, both times.

Like I said, it's different for everyone, because of their bracket and how much they are withholding.

I've read where a person on gov't assistance had to turn down a prize {trip, I think?} because the ARV is considered a windfall, so they would have "made" too much money to be eligible for the assistance.

After the rush of seeing "You WON!!!" wears off, most sweepers focus more on quality, and less on quantity.

I enter for things I'd really like to have, but wouldn't or couldn't buy, and on practical things, like coupons for free items.

Cars, trips, jewelry {actually, anything "girly" :crazytongue: } - so not interested. :whistle:

However, if they offer cash in lieu, then I'll go for it.

I don't fly anymore {messed my back up but good the last time I did :cry: } and the ARV's are set for the highest {like the trip is to NY and the winner is coming from Hawaii} so you have to do a bit of work to get a corrected 1099 if you are coming from Fla. or something.

The "hassle factor" is why I also avoid cars - it sounds great "Here's a brand new CAR!!!" but the reality is more difficult.

johnsnook just went through all the ups and downs and told us about it:

So you want to win a car?
http://www.sweepstakesplus.com/smf/so-you-want-to-win-a-car-t88577.0.html

So you want to win a car? **UPDATE**
http://www.sweepstakesplus.com/smf/so-you-want-to-win-a-car-update-t88730.0.html

So you want to win a car? **FINAL**
http://www.sweepstakesplus.com/smf/so-you-want-to-win-a-car-final-t88912.0.html

and it *totally* validated my decision to avoid those sweeps - watch me win one while trying for a lower tier prize now, lol!!! :crazytongue: :whistle:
 
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