Prizes and tax
- Thread starter jumbo11
- Start date
You definitely do pay tax on prizes, even if obtained free of charge to you; that's why some people can't accept new cars as prizes since they can't afford the thousand-or so tax bill that comes with the vehicle.
What do you mean, "submitted a tax"? A tax form?
What do you mean, "submitted a tax"? A tax form?
Slingshot377
CAGiversary!
I am pretty sure we do.
Also, don't you have to submit in a W-9 only if the value is $600+?
Also, don't you have to submit in a W-9 only if the value is $600+?
[quote name='jumbo11']yes, sorry, a tax form.
So pretty much, I just put the amount of the prize on the tax form in the appropriate field?
How much is the charge? same as the sales tax if I bought it?
Sorry for the questions. never done this before.[/QUOTE]
Taxes on prize value are much higher than sales tax...expect about a 25% tax amount if it has to be submitted to the IRS.
So pretty much, I just put the amount of the prize on the tax form in the appropriate field?
How much is the charge? same as the sales tax if I bought it?
Sorry for the questions. never done this before.[/QUOTE]
Taxes on prize value are much higher than sales tax...expect about a 25% tax amount if it has to be submitted to the IRS.
Take a look at the following article for more information - it's regarding a CA prize but many of it falls under other states too:
http://answers.yahoo.com/question/index?qid=20070627010721AAfSVnK
http://answers.yahoo.com/question/index?qid=20070627010721AAfSVnK
Sideswiper
CAGiversary!
It's taxed as income for federal taxes, correct?
The question I have is will it count towards state income tax as well as federal income tax. If Amazon doesn't charge you sales tax then I guess you don't have to pay state income tax on it.
The question I have is will it count towards state income tax as well as federal income tax. If Amazon doesn't charge you sales tax then I guess you don't have to pay state income tax on it.
electronicthroat
CAGiversary!
[quote name='jumbo11']Anyone knows who this works?
Example:
I won an Xbox from Amazon. I submitted a tax to Amazon (item was over $500). Amazon reported the item to IRS (or something like that).
Do I have to do anything now? I've never been in a situation like this. Thanks[/quote]
I didn't know Amazon did contests. That's cool. I need to check there more often.
Congratulations by the way!
Example:
I won an Xbox from Amazon. I submitted a tax to Amazon (item was over $500). Amazon reported the item to IRS (or something like that).
Do I have to do anything now? I've never been in a situation like this. Thanks[/quote]
I didn't know Amazon did contests. That's cool. I need to check there more often.
Congratulations by the way!
Crap. So, in a Non-CAG contest through bravo, I won $5000 earlier '07, and promptly spent most of it on video games and concert tickets and, you know, rent. Anyone have an informed guess on how much my taxes may be? I'm a student, and never made enough to have to pay taxes before...
jennyfur
CAGiversary!
Yeah, taxes on prizes suck. I won a $1000 prize a few years ago and when I got the tax bill for it I was in shock at how much it was. I don't recall now, but it was at least a couple hundred dollars. Luckilly there's something called a "fair market value" clause in taxes and I used that to get the price of the item down to like $600 (it was electronics, so it was selling for far less than the MSRP by the time I'd gotten it hence the price adjustment). Paying tax on the smaller amount wasn't as painful, but still sucked.
I think the only time tax is taken out of the prize itself is if the prize is cash and not an item. Look at powerball for instance, as of this posting it's at $95 million, but that's only a $47.5 million cash value.
I think the only time tax is taken out of the prize itself is if the prize is cash and not an item. Look at powerball for instance, as of this posting it's at $95 million, but that's only a $47.5 million cash value.
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