Sweepstake Taxes
I've been participating in sweepstakes of all kinds over the past few years and have easily entered in over a few thousand contests. Yes, that sounds crazy, but I work from home and have a lot of extra time on my hands. Plus, most of the sweepstakes that I participate in are easy to sign up for and have a greater reward compared to the time I spend signing up for them.
In all this time I have won my fair share of cash prizes and highly enjoy the perks of winning. Including trips around the country, odd gifts such as Star Trek model ships and the list goes on. With this said, after I won my first sweepstakes, which was a nice chunk of cash ($400) it soon dawned on me that I had to pay taxes on this sweepstakes winning.
At first, I didn't even think this was a possibility because I thought the sweepstakes sponsor might have taken the taxes out of the winnings, but I was wrong. This was a slap in the face because I was ready to run off and go on a spending rampage, as most people who just won some money would naturally do. Since this was not the case, I decided to contact a tax professional in my state to see exactly what I would owe, if I owed anything at all.
I came to learn that they wouldn't take a huge chunk out of my winnings, but since I won under $600, I only had to include it in my regular taxes. The tax pro did enlighten me that if I had won more than $600 then I would have to fill out a 1099 tax form! My jaw dropped to the floor. I couldn't believe how much trouble you have to go through just to get your winnings.
Another thing to keep in mind is that you have to fill out the form for the year you receive the money, not when you won the sweepstakes contest. This means that if you don't receive the money until the following year, even if you won in the year before, then you still file the winnings for the current year. Yes, this is confusing but is necessary.
What I learned from this experience is that the government wants to get every penny possible and you need to pay up unless you want the Internal Revenue service giving you a call.
If you win a sweepstakes and want to know how to pay taxes on your Sweepstakes Winnings, I recommend calling a tax professional in your state. The laws are different in each state and plus, you can find free consultations if you just type it in Google.
Here is more info about the Sweepstakes Taxes
http://thebestsweepstakes.com/paying-taxes-sweepstakes-wins
Good luck with your future sweepstakes!
In all this time I have won my fair share of cash prizes and highly enjoy the perks of winning. Including trips around the country, odd gifts such as Star Trek model ships and the list goes on. With this said, after I won my first sweepstakes, which was a nice chunk of cash ($400) it soon dawned on me that I had to pay taxes on this sweepstakes winning.
At first, I didn't even think this was a possibility because I thought the sweepstakes sponsor might have taken the taxes out of the winnings, but I was wrong. This was a slap in the face because I was ready to run off and go on a spending rampage, as most people who just won some money would naturally do. Since this was not the case, I decided to contact a tax professional in my state to see exactly what I would owe, if I owed anything at all.
I came to learn that they wouldn't take a huge chunk out of my winnings, but since I won under $600, I only had to include it in my regular taxes. The tax pro did enlighten me that if I had won more than $600 then I would have to fill out a 1099 tax form! My jaw dropped to the floor. I couldn't believe how much trouble you have to go through just to get your winnings.
Another thing to keep in mind is that you have to fill out the form for the year you receive the money, not when you won the sweepstakes contest. This means that if you don't receive the money until the following year, even if you won in the year before, then you still file the winnings for the current year. Yes, this is confusing but is necessary.
What I learned from this experience is that the government wants to get every penny possible and you need to pay up unless you want the Internal Revenue service giving you a call.
If you win a sweepstakes and want to know how to pay taxes on your Sweepstakes Winnings, I recommend calling a tax professional in your state. The laws are different in each state and plus, you can find free consultations if you just type it in Google.
Here is more info about the Sweepstakes Taxes
http://thebestsweepstakes.com/paying-taxes-sweepstakes-wins
Good luck with your future sweepstakes!
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