Tax Question

V

venice

Active member
I am confused on when you are required to pay taxes on winnings - I know it's supposed to be on every little winning but I feel if that were true, when you collected a $2. win from a scratch off, taxes would be taken out in some way at that time.

If you win a couple of $25 gc, a t-shirt, a sample size tube of something throughout the year, is it on the total winnings of the year? If the totals are under $600. do you need to claim?

If you win a prize over $600. do ALL companies send a 1099? For instance, I just won a Shaw rug that does not is list a dollar value or size, although I think it's 5x7. Has any one else who won and already received the rug, did you get a 1099, did you claim it if you won last year?

I don't play that many sweeps and the biggest thing I ever won is the rug so I'm not sure on paying the taxes.

Thank you for your help.
 
venice said:
I am confused on when you are required to pay taxes on winnings - I know it's supposed to be on every little winning but I feel if that were true, when you collected a $2. win from a scratch off, taxes would be taken out in some way at that time.

If you win a couple of $25 gc, a t-shirt, a sample size tube of something throughout the year, is it on the total winnings of the year? If the totals are under $600. do you need to claim?

If you win a prize over $600. do ALL companies send a 1099? For instance, I just won a Shaw rug that does not is list a dollar value or size, although I think it's 5x7. Has any one else who won and already received the rug, did you get a 1099, did you claim it if you won last year?

I don't play that many sweeps and the biggest thing I ever won is the rug so I'm not sure on paying the taxes.

Thank you for your help.
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You're going to get a dozen different responses on here...lol.....but the best advice is to ASK YOUR TAX ADVISOR.

Reporting $600 or under with no 1099 forms, is suppose to be done, but for the most part depends on your conscience. :laughing:

Some companies send 1099 forms and some don't. There's no way to tell. It depends on them, and what is written in the rules.
 
The IRS has this information on their site, and you can also call them with your questions.

Lottery winnings have different rules.

For sweepstakes, all winnings are taxable, below or above $600. On the IRS' site, they state that sponsors are required to submit 1099's on anything over $600. Anything below that is at the sponsor's discretion whether or not to submit one, and you are on the honor system to report those prizes below $600 that didn't have a 1099 for them.
 
LIDARKSIDE said:
For sweepstakes, all winnings are taxable, below or above $600.
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LDS.....
....When you say "taxable", does that mean a "write off"? or actually paying on them? And, do you "really" keep every little paper you get with your wins? even the ones that where per-say, a limited edition disney pin?
 
champagne said:
....When you say "taxable", does that mean a "write off"? or actually paying on them? And, do you "really" keep every little paper you get with your wins? even the ones that where per-say, a limited edition disney pin?
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It means you are required to pay taxes on all prizes. Anything you win that did not have a 1099 submitted, you have to keep track of.

The information is on the IRS' site, but they don't get into specific details or categories. They simply state that people are responsible to pay taxes on the fair market value of any prize they win.

That legally encompasses "all" prizes.

http://contests.about.com/od/taxesfinances/tp/payingtaxes.htm

http://contests.about.com/od/taxesfinances/ht/sweepstakestax.htm
 
Thank you for your answers. For the most part I've done my own taxes using one of the tax kits you download so I'll have ask around for a CPA. I'll report the rug but keep looking for it on amazon or elsewhere for sale prices.
 
Thank you for your answers. For the most part I've done my own taxes using one of the tax kits you download so I'll have ask around for a CPA. I'll report the rug but keep looking for it on amazon or elsewhere for sale prices.
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If your taxes are basically straightforward and all you are adding in is wins, it is still easy to use a tax program yourself (either the free ones for those with incomes under $50k(?) or the ones you pay for). Remember, the IRS has a free helpline. They can provide answers to your questions, and are easy to reach if you call outside of Feb-Apr. Always write down the info they give you, including date and time of call and person you spoke to. The IRS stands behind all of the advice the helpline gives, even if it turns out to be incorrect (not that I've had that problem myself, they are very knowledgeable).

But I know from experience that adding a 1099-MISC with a tax program is not hard, nor is it hard to add in the extra prize income that did not come with a 1099.
 
venice said:
Thank you for your answers. For the most part I've done my own taxes using one of the tax kits you download so I'll have ask around for a CPA. I'll report the rug but keep looking for it on amazon or elsewhere for sale prices.
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I won a trip to Hawaii that I had to claim on last year's tax form. I used Turbo Tax and there was a spot for the 1099-Misc. It was really a lot simpler than I thought it would be.. good luck and have fun winning!!!!
 
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