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mommamia8
January 30th, 2008, 9:05pm
When you win a prize and have to pay taxes you get a 1099, correct? And include this amount as income tax for that year?

You don't actually have to write a check to the government (state or feds) shortly after winning, correct?

Can you tell I'm a newbie? hehe. I've never been 1099'd so I don't know how it works.

Thanks!

joane75
January 30th, 2008, 9:09pm
I just received my 1099 today for a contest that I won in April. So, you don't have to pay right after you win.

plytle1
January 30th, 2008, 9:12pm
I won the Malibu Rum trip to Barbados and took the trip in May 2007. I have yet to receive my 1099, but did have to fill out an affy....should I be expecting one before I get my taxes done?

Pam in NJ

(thanks!) :hello:

fastfreddie1959
January 30th, 2008, 9:13pm
When you win a prize and have to pay taxes you get a 1099, correct? And include this amount as income tax for that year?

You don't actually have to write a check to the government (state or feds) shortly after winning, correct?

Can you tell I'm a newbie? hehe. I've never been 1099'd so I don't know how it works.

Thanks!

Do an ARV-search on the product or prize-keep a record of it.
If the prize is not worth a thousand dollars then why should you pay taxes on it.
I do know that florida is anything above $650.00
Not sure about other states.

http://contests.about.com/od/taxesfinances/ht/sweepstakestax.htm

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

mommamia8
January 30th, 2008, 9:24pm
Thanks for the replies! FastFreddie those links were awesome! Very informative and answered my questions. Thank you!

tombkeeper
January 30th, 2008, 9:28pm
All companies are required to issue you a Form 1099 for any prizes valued over $600. They are usually sent to a recipient by January 31. It is not limited to prizes, The IRS requires anyone who is not your employer and pays an individual $600 or more in income to report it on a Form 1099. Of course your employer should be reporting your income on a W-2 that is sent to you.

plytle1
January 30th, 2008, 9:34pm
...for the info., everyone!

As always, one can count on our OLS experts to know the answers!

Again, my humble thanks!

Pam in NJ :wink4:

mrsgerbil
January 30th, 2008, 9:51pm
I won the Malibu Rum trip to Barbados and took the trip in May 2007. I have yet to receive my 1099, but did have to fill out an affy....should I be expecting one before I get my taxes done?

Pam in NJ

(thanks!) :hello:

Yes!

judyv01510
January 30th, 2008, 10:05pm
That question is not easily answered.
In theory tax is due in the quarter you receive it. But most people pay too much during each quarter and winning are relatively small and the tax the over, pay covers the tax due.

But let say you win $1,000,00 on January 1. You are required to file an estimated tax for the first quarter of the year.

But that is all theory, that is the technical law.

Start worrying if amount of the prize or combination of prizes will create a tax equal 20% of your tax liability. Then get an accountant.

PS. Never take the advise of someone on OLS , we are not liable for your tax penalty.
I am a retired IRS Agent and still if you win a substantial prize get an accountant. If it is really big talk to several accountants. ( They are known to be wrong too) Taxes are complicated and general information should not be used a gospel. There are too many variables.

sugarfruit
January 30th, 2008, 10:30pm
I got a good one. I opened a new bank account in our town so I would have to drive over 10 miles away to do my banking. They gave me a "free gift" for opening the free checking account. Yesterday, I received a 1099 for the "free gift". Have to pay taxes on $13.79, what a crock!!!!!! They even had it coded wrong, they coded it as a savings bond!!!!! Gee, great bank.

elittle2004
January 30th, 2008, 10:51pm
I won a trip back in March 2007 and I still haven't recieved a 1099 for it either.

toddvb
January 30th, 2008, 11:10pm
I got a good one. I opened a new bank account in our town so I would have to drive over 10 miles away to do my banking. They gave me a "free gift" for opening the free checking account. Yesterday, I received a 1099 for the "free gift". Have to pay taxes on $13.79, what a crock!!!!!! They even had it coded wrong, they coded it as a savings bond!!!!! Gee, great bank.

I would ask them where my savings bond is that I am paying taxes on. Either that or they should change the 1099 to reflect what they did give you.

Oh, and you are supposed to pay taxes on all your wins; any amount.

Not sure about gifts. I know there is a gift tax, but don't know any of the details.

Consult your/a CPA or whomever does your taxes if someone else does them.

toddvb
January 30th, 2008, 11:11pm
I won a trip back in March 2007 and I still haven't recieved a 1099 for it either.

The deadline for sending them is tomorrow, the 31st. You should probably get it next week. I haven't gotten mine yet either.

judyv01510
January 30th, 2008, 11:45pm
As I said I am retired from IRS with a federal pension still no W2p (p is for pension).
Who do i call Bush???/ LOL

zohyeahz
January 30th, 2008, 11:53pm
I won 2 trips last year and have yet to receive a 1099. What if they don't send them? Then what?

calexile
January 31st, 2008, 12:01am
Waiting for tax statement on a federal pension.?? I downloaded and printed mine over a month ago. You can wait for a letter in the mail that may never come, or you can go get what you need.

suelee000
January 31st, 2008, 12:25am
I won 2 trips last year and have yet to receive a 1099. What if they don't send them? Then what?

All you have to declare is the "fair market value" of the prize. I won a trip to Jamaica and never got a 1099. I just plugged in what it would have cost me to book the same trip via the company's website.

PS ALWAYS declare your winnings no matter how small. One guy on OLS got audited. Because he was so meticulous about recording all wins, the IRS never questioned any of the fair market value's that he put on his big prizes.

fantome2006
February 1st, 2008, 12:56am
If they don't send the 1099 and you have some kind of proof that you won the prize, just give it to whoever does your taxes. That's what we're planning to do since so far, we have not received it yet.

shefrito
February 1st, 2008, 1:04am
Since you are new here Momma, keep FastFreddie's name handy. He is absolutely brilliant and has helped out TONS of people with all kinds of questions, technical questions also.

lifesfun
February 1st, 2008, 11:56pm
What if you get a 1099 for a win but sold that item for say 1/2 of that amount on ebay? Can you use your ebay records and subtract the paypal and listing fees? Is that proof enough of fair market value? Anyone know?

IndyWinner
February 2nd, 2008, 12:13am
What if you get a 1099 for a win but sold that item for say 1/2 of that amount on ebay? Can you use your ebay records and subtract the paypal and listing fees? Is that proof enough of fair market value? Anyone know?

This is a good question. I would love to see a definite statement from the IRS. I do know that one woman who won a unique art object claimed what she sold it for on EBay and the IRS denied this and made her pay a lot more. I also know of a guy who sold an autographed guitar on EBay and the IRS did not let him claim what he sold it for. But I bet people have done it and had no problems, too.

I do think if you have an appraisal by an expert that is good proof of value. It worked for me on a piece of jewelry that had an inflated ARV. Good luck!

judyv01510
February 2nd, 2008, 12:27am
This is a good question. I would love to see a definite statement from the IRS. I do know that one woman who won a unique art object claimed what she sold it for on EBay and the IRS denied this and made her pay a lot more. I also know of a guy who sold an autographed guitar on EBay and the IRS did not let him claim what he sold it for. But I bet people have done it and had no problems, too.

I do think if you have an appraisal by an expert that is good proof of value. It worked for me on a piece of jewelry that had an inflated ARV. Good luck!


Those people should have fought. If you think you are right take it to Appeals. It costs nothing and they have alot more leaway then an auditor and an agent. They weigh the cost to the government if the issue goes to court.

FMV is defined as what a willing buyer and a willing selling agrees upon.

April1p
February 2nd, 2008, 12:31am
How do you experienced sweepers handle all the little things you win? I mean say you win a directors chair from Campbell's soup, or a t-shirt from Ryobi, or coupons for food, game downloads and ring tones....ect. What do you do with all that stuff, that just shows up at your house or in an email, with no affy and you know that Ryobi t-shirt didn't really have an ARV of $26 bucks. Inquiring minds want to know.

IndyWinner
February 2nd, 2008, 12:42am
How do you experienced sweepers handle all the little things you win? I mean say you win a directors chair from Campbell's soup, or a t-shirt from Ryobi, or coupons for food, game downloads and ring tones....ect. What do you do with all that stuff, that just shows up at your house or in an email, with no affy and you know that Ryobi t-shirt didn't really have an ARV of $26 bucks. Inquiring minds want to know.

I add the fair market value up and lump all the little prizes together under "Misc. Sweepstakes Wins." Sometimes FMV is easy to find, just look at Walmart, Amazon.com or somewhere like that, sometimes you have to make a guess. For a tshirt, I'd probably guess $5, unless it was especially nice. I list any wins I have 1099s for separately, then whatever all the other stuff adds up to.

cubhill
February 3rd, 2008, 3:14pm
I won money from Canada last year and they said they do not send 1099s. Do I just list the amount without it? Please help me with this.

pinkroses
February 6th, 2008, 10:02am
I add the fair market value up and lump all the little prizes together under "Misc. Sweepstakes Wins." Sometimes FMV is easy to find, just look at Walmart, Amazon.com or somewhere like that, sometimes you have to make a guess. For a tshirt, I'd probably guess $5, unless it was especially nice. I list any wins I have 1099s for separately, then whatever all the other stuff adds up to.

Okay, maybe I just didn't get enought sleep last night, today's my day off, baby's at daycare & I should have gone back to bed but I find myself sweeping on OLS instead of sweepsing the floors.. Anyway, is this reply about lumping all the prizes together for tax purposes ?? I have never won a really 'Big' prize... a dvd here... a t-shirt there.. my 'biggest' prize was a $100. gc for a spa and why would you need to keep a record of it if you're not providing your social security # to these companies that send the prizes, ???

webwalking1
February 6th, 2008, 10:19am
From what I understand, if you win a trip in 2007, but do not take the trip until 2008, you pay taxes in 2008. Or the year you actually take the trip, not the year you won the trip.

I won a spotting scope from the NRA last year, have yet to receive it but, they did get out my 1099. That it not fair. Even the sponsor said that is not the correct way to do it. Oh well.... now to wait for my prize. heehee

:nokiss:

caseycupcake
February 6th, 2008, 10:34am
What if you get a 1099 for a win but sold that item for say 1/2 of that amount on ebay? Can you use your ebay records and subtract the paypal and listing fees? Is that proof enough of fair market value? Anyone know?

Ebay is not a source for fair maket value. The IRS considers FMV the amount an average person would pay in getting that item. For example, if you wanted to buy a CD, you know you would pay $12. Of course, you might be able to find it in a bargain bin somewhere, or on ebay for $3. But $12 is the FMV. That is the amount the IRS will accept. Everyday prices at Best Buy for example.

bjdotson
February 6th, 2008, 10:43am
That question is not easily answered.
In theory tax is due in the quarter you receive it. But most people pay too much during each quarter and winning are relatively small and the tax the over, pay covers the tax due.

But let say you win $1,000,00 on January 1. You are required to file an estimated tax for the first quarter of the year.

But that is all theory, that is the technical law.

Start worrying if amount of the prize or combination of prizes will create a tax equal 20% of your tax liability. Then get an accountant.

PS. Never take the advise of someone on OLS , we are not liable for your tax penalty.
I am a retired IRS Agent and still if you win a substantial prize get an accountant. If it is really big talk to several accountants. ( They are known to be wrong too) Taxes are complicated and general information should not be used a gospel. There are too many variables.


This is not totally true. If you paid at least 90% of your tax liability the previous year (through withholding, etc) You do not have to pay the estimated tax. If you had two really good winning years in a row, then the second year you would have to file quarterly tax payments.

Second point (very trivial, but could be important) everybody says that the law requires a 1099 "over $600" but the law saws $600 and above (in other words over $599)

You are required to pay taxes on all wins (exception being prizes with a company logo valued at $10 or less)

bomar97
February 6th, 2008, 10:51am
If I won a big prize, I would probably pay a quarterly tax on it.. but I'm in the low income end and not sure if the little tax taken out of our pension would cover it..

The little ones you can always keep track of as you win them.. check them off as you receive them..

I know some people don't bother adding small wins to their taxes.. personal preference I guess. I don't think it would be a big issue for those who win very little as the excess tax owed is not much.. If you win a lot of littles.. then maybe you might worry that your neighbor or delivery person would "inquire" with the IRS as to whether you pay taxes on them.

But if you win big enough that you should get a 1099, then definately don't go w/o reporting it! Even if you don't receive the 1099.

The largest win I ever had was $600.. and it cost a total of $90 extra in federal tax... no big deal.. the win was definately worth more than the $90. (I didn't owe state tax because of low income)..

Also.. I know about the banks reporting those "free" gifts.. we got a tax form for the junky $10 clock radio DH got back in the '90s..

PanamaKay
February 6th, 2008, 10:56am
Boy, there are some really honest taxpayers in here. Even the casinos don't give you a 1099 if it is less than $600. For God's sake, the IRS doesn't know you won anything that you did not get a 1099 for. So why report it? A trip winning is one thing, and yes, you have to deal with that. But, adding up t shirts and cd wins is ridiculous. And, I do taxes for a living, so I would never advise my clients to do that. If it is over the limit of $600, then report it. But other than that, I would say forget about it.:rolleyes:

wolflady26
February 6th, 2008, 1:48pm
Boy, there are some really honest taxpayers in here. Even the casinos don't give you a 1099 if it is less than $600. For God's sake, the IRS doesn't know you won anything that you did not get a 1099 for. So why report it? A trip winning is one thing, and yes, you have to deal with that. But, adding up t shirts and cd wins is ridiculous. And, I do taxes for a living, so I would never advise my clients to do that. If it is over the limit of $600, then report it. But other than that, I would say forget about it.:rolleyes:

It's not really a great idea to advise people to break the law. Some people don't report small prizes and get away with it, but technically, that is illegal. And it's certainly not ridiculous to follow the law. Though I agree that it's a bit ridiculous that that's what the law asks us to do.