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View Full Version : Affy Question - When do you get them?


retellingstories
February 6th, 2006, 1:41pm
I'm reading that a lot of members are geting 1099 forms for taxes, and also a lot of posts on returning affys. At what ARV do you usually receive an affy, and when is the 1099 applicable? I just starting sweeping in January, and my biggest win was $740 of merchandise, but since it is numerous items in a GP, I'm guessing I don't have to claim it? I was under the impression that as long is it is under $1500, you don't have to report it. Is this true? Any one know?

suelee000
February 6th, 2006, 2:38pm
YOU HAVE TO CLAIM ALL PRIZES, NO MATTER HOW SMALL. The sponsor doesn't have to send the information about the prize to the IRS, unless the value is over "$600, although some do require affys with SSN for much smaller prizes. You still have to claim the "fair market value" of the prize on your income taxes.

You get 1099s for prizes that you RECEIVED last year. So you will claim thge "fair market value" of the stuff that you've won so far on next year's taxes.

The sponsor is required by law to send out 1099s for prizes awarded the year before by Jan 31. THe problem that someone pointed out is that on the form COPY A goes to the IRS and that deadline is in Feb. COPY B (under copy A) goes to the prizewinner. Alot of 1099 are very late in coming.

Some sponsors screw up and send 1099s with inflated values (trips are notorious) and you have to come up with the FMV on your own. Some sponsors have even sent 1099s before the prize is sent. Big no no. They have to send you the prize before you pay taxes on it.

tofu
February 6th, 2006, 3:15pm
I've gotten affys for prizes worth less than $600 as well as for prizes worth over $600. It depends on whether the company wants paperwork to show that you are eligible.

Technically you have to add up the FMV (fair market value) of ALL of your sweeps winnings received in a given year and report it on that year's taxes - not just wins over $600. Make sure you use the FMV, though, since ARVs are generally way higher than the FMVs!!

retellingstories
February 6th, 2006, 3:33pm
Really? I had no idea you had to claim all prizes, even dinky ones. A few years ago a won a small amount in a casino, and the cashier told me I didn't have to claim it unless it was over $1200. Maybe they just don't report you. Just out of curiousity, what kind of taxes do you pay on prizes?

suelee000
February 6th, 2006, 4:40pm
Really? I had no idea you had to claim all prizes, even dinky ones. A few years ago a won a small amount in a casino, and the cashier told me I didn't have to claim it unless it was over $1200. Maybe they just don't report you. Just out of curiousity, what kind of taxes do you pay on prizes?

All the cashier meant (or should have meant) was that the casino didn't have to report it.

Prize amounts are added to ordinary income. What you pay in taxes is based on what tax bracket that you are in. If you are curious, just add in the amount of the prizes to your gross income and go from there.

Scooterino
February 6th, 2006, 5:02pm
It's hit and miss for me on affy's. It all depends on whether or not the sponsor/judging agency decides to send you one. There ARE rules of course (IRS rules), but they're not always followed. For instance, last year I won a prize with an ARV of $1200 through Glamour and never got a 1099 on it. This year (last tax year) I won $2000 from Dollar.com and I DID receive a 1099 on that. I suspect that if a judging agency handles it, you will almost certainly get a 1099 on items over $600. If it's run by the sponsor themselves, it's really anyone's guess!

Scooterino
February 6th, 2006, 5:05pm
Really? I had no idea you had to claim all prizes, even dinky ones. A few years ago a won a small amount in a casino, and the cashier told me I didn't have to claim it unless it was over $1200. Maybe they just don't report you. Just out of curiousity, what kind of taxes do you pay on prizes?

That's the "reporting requirement" for the sponsor. Legally it's still up to the winner to declare every prize won on their taxes, although I am willing to bet that most people don't claim items that they don't receive 1099's for. For all intents and purposes, the IRS has no record of you receiving a prize unless the sponsor files a 1099.