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Thread: question about reporting taxes info

  1. #1
    Senior Member zonabogusia's Avatar

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    question about reporting taxes info

    I'm sorry if it was answered before, I can't seem to find a straight answer. I just had my first bigger win, ARV $299. What do I do about taxes? Do I have to report it now (if so, how do I do it?) or when I file my taxes for 2009? Is it true that you only report wins over $600? how does it work? I have no clue... Thank you so much!

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    Re: another tax question

    No expert here but I have an accounting degree that I don't use and I've taken tax classes....

    If you won in 2009 you report it when you file your taxes for 2009. I believe that companies are only required to issue 1099s for wins over $600 but they may also do it for smaller wins also. You are supposed to report all wins although the IRS only knows about the ones they get the 1099s for.

    I'm sure others will have better info on this.

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    Re: another tax question

    Quote Originally Posted by julie604 View Post
    No expert here but I have an accounting degree that I don't use and I've taken tax classes....

    If you won in 2009 you report it when you file your taxes for 2009. I believe that companies are only required to issue 1099s for wins over $600 but they may also do it for smaller wins also. You are supposed to report all wins although the IRS only knows about the ones they get the 1099s for.

    I'm sure others will have better info on this.
    What she said. :laughing:

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    Senior Member zonabogusia's Avatar

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    Re: another tax question

    Thank you so much!

  5. #5
    Sweepstakes Plus Member

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    Re: another tax question

    That is correct. You do not have to pay taxes on anything under 600.00. If it is worth more then 600.00 then you have to fill out a tax form before they will give you your winnings. I won 5,000.00 a few years ago and ended up paying 2438.00 in taxes so you figure about 50% on anything over 600.00. That makes me very careful about the sweeps I enter. I figure anything over 600.00 I am basically going to end up paying 1/2 price for the item. A lot of times I end up passing because it is really not something I want to pay 1/2 price for. If you rely heavily on your tax refunds which a lot of people do be very sure you want what you won cause the Government is going to get you in the end ! (LOL) I also try to enter the strictly cash prizes. That way I can put back 1/2 for the taxes. Hope this helps. I was very glad I found all this out on a cash win. I would have hated to have won a 5,000.00 doghouse or something! LOL! GLA!

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    Re: another tax question

    Quote Originally Posted by whitecoma View Post
    You do not have to pay taxes on anything under 600.00. If it is worth more then 600.00 then you have to fill out a tax form before they will give you your winnings.
    That's incorrect. If you go to the IRS' site, they state that prizes are taxable at fair market value. There are no stipulations stating that only certain prizes are taxable and others aren't. There is no room for interpretation other than everything considered a prize is taxable.

    They require that companies report any prize over $600. However, a company most certainly can report any prize under $600 at their own discretion. I've had a number of prizes, as low as $85.00, reported to the IRS.

    Any prize that the sponsor does not report to the IRS is the responsibility of the prize winner to report on their own.




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    Re: another tax question

    The year that I won all the cash, I took all my sweepstakes stuff to my tax lady. I thought that if I had won over 600.00 dollars I had to pay takes on everything but she didn't even bother with anything but the 5 grand. Handed the rest of the papers back to me and said she didn't need them. That is where I got that info at.

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    Re: another tax question

    Quote Originally Posted by whitecoma View Post
    The year that I won all the cash, I took all my sweepstakes stuff to my tax lady. I thought that if I had won over 600.00 dollars I had to pay takes on everything but she didn't even bother with anything but the 5 grand. Handed the rest of the papers back to me and said she didn't need them. That is where I got that info at.
    Then she apparently doesn't know how to handle the reporting of sweepstakes prizes. Keep in mind, that most CPA's (hopefully, that's what you used) have no experience handling the reporting of sweepstakes prizes.

    Just like our CPA, we gave her all the documentation on the prizes we won and asked her to check the information out with the IRS also which she did and verified.

    It sounds to me that your CPA may have been going by the guidelines of reporting lottery, casino, etc., winnings which have totally different reporting guidelines than sweepstakes winnings.

    Also, keep in mind, that even if you didn't get a 1099 on any prize, even possibly a smaller one, it doesn't mean that the sponsor didn't report it to the IRS.

    Some sponsors will make out a 1099 after an individual has accumulated $600.00+ in prizes from them. For example, if you have won three times from a sponsor and each prize was worth $200.00, they may then send in a 1099 for $600.00.

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    Re: another tax question

    Thanks for the info. Yeah, she is a CPA. I am going to have to find out about this. I try never to cheat on sweeps and sweeps winnings. Bad Karma you know! I try to keep my Karma good and it seems to work out well. I have been very blessed with what has been given!

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    Re: another tax question

    Quote Originally Posted by whitecoma View Post
    Thanks for the info. Yeah, she is a CPA. I am going to have to find out about this. I try never to cheat on sweeps and sweeps winnings. Bad Karma you know! I try to keep my Karma good and it seems to work out well. I have been very blessed with what has been given!
    Here's one section from the IRS that defines reporting prizes (Page 4, Box 3, Other Income):

    http://www.irs.gov/pub/irs-pdf/i1099msc.pdf

    It's pretty straight up--report the required reported income of $600.00 or more on 1099's, and report other prizes and awards. You'll notice that they don't define prizes as those that are reportable and those that aren't. It's straight up "also enter in Box 3 prizes and awards...". There are three exceptions, but you'll see none cover winning and accepting a prize.

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