Orbitz Disney win -- Will I be sorry?

P

pwdeb

New member
I just saw that someone commented in the "comments" section of the Orbitz Disney sweepstakes that they won plane tickets from Orbitz a while ago that were worthless. I just returned my paperwork a few hours ago, dropped it in a Fed Ex box. Am I going to be sorry that I accepted the tickets?

The poster said she had to pay taxes on a prize she wasn't even able to use. Is this true? You pay taxes even if you don't actually cash in the prize? And how much are the taxes?

This is all new to me. Tell me I won't be sorry!

Deb
 
If you are flexible, I'd bet you can use them. Don't wait until they run out - try to use as soon as possible.

I won tickets before (not from Orbitz) and had no trouble using them, even got the dates we wanted.

For taxes:

You should track the name and value of all prizes you win. I usually get the amazon.com price for most wins (I win mostly books and DVDs) but you can get whatever the fair price is at the time you win/get the prize from any source. Keep a list to include with your tax stuff. I can't remember off the top of my head, but there is a line on the tax form where you can add extra income. How much you get taxed will depend on your marginal rate (for most households, it is 25% or less). For those people who normally get a refund this will mean a smaller refund. For those of us who live more on the edge with the IRS, that means actually paying more.

This is why it is important to enter for items you actually want and don't mind paying the taxes on! For a $400 item, you have to think "is this worth $100 to me"? I'm very careful with that.

If you had to give your SS#, they will send you a 1099 in Jan to include with your taxes (and send one to the IRS). In that case, you enter it with other 1099-MISC on your tax form.
 
Yes you do pay taxes on any prize that you receive or accept even if you decide not to use it.
 
Thanks for the replies regarding the tax part of my question.

Has anyone else run into problems with using their Orbitz plane ticket wins? Were you able to book what you want for when you wanted or did they have their own plans for your tickets that you had to abide by. I know that they get to choose the airlines you can use the ticket on. Does your whole trip have to be booked thorugh them or just the flight?

Thanks again!

Deb
 
This type of prize comes in the form of vouchers. They do not have a dollar value. When you use them to book seats, you will then receive actual tickets that do have a dollar value.

You "DO NOT" pay taxes on unused vouchers.

You NEVER pay taxes on anything you actually never received. That would be like paying taxes on money you never got. Vouchers have no value; the tickets you receive do. Once you get your tickets, and given that they are not cancelled and refunded, and you use them, you are then liable for taxes on the actual amount of the booked seat(s).

From the rules:

Airfare for two (2) awarded in the form of two (2) travel vouchers on an airline determined solely by the Sponsor.
 
LIDARKSIDE said:
This type of prize comes in the form of vouchers. They do not have a dollar value. When you use them to book seats, you will then receive actual tickets that do have a dollar value.

You "DO NOT" pay taxes on unused vouchers.

You NEVER pay taxes on anything you actually never received. That would be like paying taxes on money you never got. Vouchers have no value; the tickets you receive do. Once you get your tickets, and given that they are not cancelled and refunded, and you use them, you are then liable for taxes on the actual amount of the booked seat(s).

From the rules:

Airfare for two (2) awarded in the form of two (2) travel vouchers on an airline determined solely by the Sponsor.
Click to expand...

If you fill out an affidavit then you do pay taxes whether your receive vouchers or the actual tickets.
 
anikka said:
If you fill out an affidavit then you do pay taxes whether your receive vouchers or the actual tickets.
Click to expand...

That's incorrect. The affidavit is not proof of the actual established value of any prize that you win. The ARV is just an approximate retail value. The IRS requires that the FMV (fair market value) is reported. You can only pay taxes on something you won of value. The vouchers do state on them that they have no dollar value. Vouchers are just a promise to give you something of value in return. If you do not turn them in for tickets, then you owe nothing in taxes. When vouchers are not used, then there is nothing purchased and nothing to be taxed.

When we won five Southwest vouchers, they had a exchange value of up to $2,000. We used four vouchers to get four tickets that came out to $800.00+, and that's what we were required to pay taxes on.
 
I'm going to side with annika on this one.

If you fill out the affy, you WILL get the 1099 next year, and Orbitz WILL tell the IRS that they gave you two vouches of a certain value. If the winner chooses to not report the win because they choose not to use it, they do so at their own peril.

If you find you cannot use the vouchers, and that Orbitz will not work with you, discuss with your tax professional how to approach reporting the extra income.
 
blackleatherrain said:
I'm going to side with annika on this one.

If you fill out the affy, you WILL get the 1099 next year, and Orbitz WILL tell the IRS that they gave you two vouches of a certain value. If the winner chooses to not report the win because they choose not to use it, they do so at their own peril.

If you find you cannot use the vouchers, and that Orbitz will not work with you, discuss with your tax professional how to approach reporting the extra income.
Click to expand...

Our 1099 was changed to the true value of $800.00+ at our request and documentation which the IRS requests you try first when the 1099 does not reflect the true value.

The ARV is an approximation of the value of the tickets. They are not giving you tickets. They are giving you vouchers that have no face value. You cannot pay taxes on something of no value, and why would you even do such a thing. The ARV is reflecting the approximation of the value of the airline tickets once you exchange the vouchers for them. If you do not use a voucher, you are not getting your prize, and the sponsor is not paying for anything. Therefore, there is nothing to pay taxes on.

As I said before, the IRS requests that you pay taxes on the FMV (fair market value/the true value of a prize), not the ARV. Affidavits just give approximate values, not true values. You need the true value of a prize in order to know what to pay taxes on.

We won seven trips so far, and all but two of them the sponsors had an amount less than half of the ARV on the 1099. On the other two, we requested them change the 1099's to refect the true value which they did (it was overlooked by their accounting).

I've been sweeping online now for ten years, and I've checked everything out regarding taxes with the IRS and my CPA. This info is correct.
 
Even though I agree with LIDARKSIDE........My suggestion to the OP is for him/her to ask this question to whoever does their taxes.

Even though I agree with L.I., I would never take tax advise from someone online. :laughing:
 
I suggest you contact a tax professional.. I dont believe its wise to take advice from sweepers about tax issues. :laughing: I am a sweeper myself but do not know enough about taxes to tell anyone what to do.
 
As for taxes, I don't have a job, dh is on disability and is self-employed as a pastor of a small church (15 adults). We've used TurboTax for years, so I guess I will rely on Mr. Turbo to figure out the tax issues.

BUT -- My real question was not so much the taxes as it is dealing with Orbitz. That's what I am concerned about -- Will I be sorry for accepting this prize from Orbitz? Will the vouchers actually work? A poster in another place said the airline more or less laughed at her vouchers because they were so low-rated. I'm not familiar with airlines and flying, so I don't know about ratings and usefulness of vouchers. Those of you who travel regularly, what can you tell me?

Deb
 
I never heard of such a thing and wonder if the person who posted that was making that up.

The vouchers are from the airline themselves, so I can't begin to believe that someone got laughed at for them; and I don't know what they could possibly mean by "low-rated".

We had five vouchers with a total ARV of $2,000. So, we could submit them for tickets up to $400 each. We picked out the airline and flight and booked the seats online. We printed up the flight information and booking number. When we got to the airport they pulled up our reservations by the information on the paper. Then we gave her four of the vouchers for the four booked seats and got four tickets back. We never had a problem.

Oh, and the vouchers do have expiration dates too.
 
pwdeb, Orbitz is a well-respected travel company. I would highly recommend you carefully read the rules on how to redeem the vouchers, and follow them to the letter. Even low-rated vouchers are worth round trip flights, you'll just be looking at restricted availability, most likely.

And, finally, congrats on your win - I've been trying to win travel items, too!
 
I really appreciate all your input. This is all new to me.

Here's the comment that caused me concern (the reason I started this topic):
"Last year I won two NWA tickets in an Orbitz sweeps valued at $1000. When I tried to make reservations 6 months in advance for a trip to Las Vegas I was told the classification of the tickets was so far down the list that nothing was available within two weeks of when we wanted to go. Ended up having to pay taxes on worthless tickets."

One of the restrictions that I know is on the vouchers is that Orbitz picks the airline, so I don't get to choose which airline I travel on (and dh will not be a happy camper if it's not a non-stop flight). The window on these tickets is 60 days rather than 6 months.

Deb
 
She mistakenly refers to them as the tickets. She only had vouchers in which she never turned in for the actual tickets which were the actual prize. Alot of people end up willingly paying taxes on the ARV's not knowing any better. I questioned paying taxes on something where the ARV was far more than the true value. I thought of that as paying taxes on a value of which I didn't receive. So, I checked with the IRS and had our CPA look up related information, and thank God I did. I started searching on the internet and found alot of information on the issue of taxes on prizes.

With any of the trips we won, our tickets or vouchers were issued directly through the airline. On two of the trips where I booked my own flights, I found them cheaper directly from the airline than through sites like Orbitz, Travelocity, etc. I remember when I worked and had to book trips, the agency we dealt with said they can only sell the seats that the airlines release. The airlines themselves keep blocks of seats that you can only get through them.

So, maybe sites like Orbitz are being issued vouchers by the airlines with the maximum restrictions. That's the only thing I can think of.

Our trips went without a hitch; but, then again, none of them were through any of these types of sites.
 
I'm with PWdeb...I, too, won $1,000 Northwest vouchers last year from Orbitz and couldn't even begin to use my vouchers for a trip. The planes didn't go anywhere I wanted to go, and they were good for their "sister" plane (or small airbus, if you will), that didn't leave from any airport near me, and there were a bunch of other problems. If you do win, start calling early and be extremely flexible....
 
Orbitz called yesterday and said that the vouchers would be in the mail within 2 to 4 weeks. I've already planned a trip to Disney -- if the vouchers don't get here for 4 weeks, then I will have to change my dates (probably not too hard to do). Orbitz asked me to pick the airport I wanted to leave from, so I chose Harrisburg. All but one airline from there goes where I want to go, and one of those even has a nonstop flight. The rules state that Orbitz picks the airline -- I sure hope they don't pick the one airline that does not go to FL, after all, it was a Disney contest! I'll update when I get the vouchers.

Oh, dh says that if the vouchers end up being useless to us, we're still going. We drove the first time we went (Oct. 2007) and we can certainly drive again!

Deb
 
You must log in or register to reply here.
Back
Top