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gottalotagals
December 29th, 2006, 10:57pm
I am sure this has been asked a million times, but I did a search and couldn't find anything.

What are the taxes on large wins? Is there an average percentage?

shawnky
December 29th, 2006, 11:05pm
Total State And Federal....37 1/2 %

pambanter
December 29th, 2006, 11:05pm
The taxes on wins are the same as income. So, you add the FMV not the ARV to your taxes under Misc. Income and figure it as if it were just like any other income.

pambanter
December 29th, 2006, 11:06pm
Total State And Federal....37 1/2 %
Why are you even saying something so irresponsible? You have NO WAY of knowing what the OP earns, how many tax deductions, etc.

kakes
December 29th, 2006, 11:07pm
all depends on what you report on your 1040 income tax return.... big wins usually come with 1099 forms.. that amt. is INCOME. Add wins to your income, minus your allowable deductions and then hit the tax table.. all depends on where you fall = what you will owe.. everyone is different.

pan_tiques
December 29th, 2006, 11:09pm
If I declare the FAIR market value instead of the amount the sponser declares on a 1099, aren't I just ASKING for an audit???
Should I cut out newspaper ads of the Fair market value as a way of proving the lower of the two figures?

pambanter
December 29th, 2006, 11:11pm
If I declare the FAIR market value instead of the amount the sponser declares on a 1099, aren't I just ASKING for an audit???
Should I cut out newspaper ads of the Fair market value as a way of proving the lower of the two figures?
No, you are not just asking for an audit but yes you should keep any and all records of FMV but do not file with your taxes. Just keep em in case.

The tax forms are ASKING for FMV, not ARV, so you would by lying in many cases if you claimed ARV. You wouldn't want to lie on your taxes, would you? :halo:

gottalotagals
December 29th, 2006, 11:14pm
The taxes on wins are the same as income. So, you add the FMV not the ARV to your taxes under Misc. Income and figure it as if it were just like any other income.

OH okay! Thank you so much. :) I understand how it works now.

pambanter
December 29th, 2006, 11:17pm
http://www.irs.gov/instructions/i1099msc/ar02.html#d0e620

Box 3. Other Income

Enter other income of $600 or more required to be reported on Form 1099-MISC that is not reportable in one of the other boxes on the form....

...Also enter in box 3 prizes and awards that are not for services performed. Include the fair market value (FMV) of merchandise won on game shows. Also include amounts paid to a winner of a sweepstakes not involving a wager. If a wager is made, report the winnings on Form W-2G, Certain Gambling Winnings.

Also, Pub. 525 deals with reporting winnings on line 21 of your 1040.

http://i3.photobucket.com/albums/y59/pambanter/fmv.jpg

pambanter
December 29th, 2006, 11:35pm
So, quite frankly, I don't know how the sponsors are getting away with reporting ARVs when the 1099 Misc clearly asks for FMV. Oh well.