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Question about taxes on winning a $50k eliminator contest
Posted on 9/16/13 at 10:09 am
Posted on 9/16/13 at 10:09 am
I'm in a large contest with hundreds of entries that could bring the pot to nearly 50k assuming there's only one winner. I probably won't win it but I was just curious as to what the process would be if someone would win that much money and an estimate on what the taxes would be.
Not sure if this is relevant info or not but the contest is organized by a friend, so it's not through a major gambling organization or anything like that.
Not sure if this is relevant info or not but the contest is organized by a friend, so it's not through a major gambling organization or anything like that.
4
Posted on 9/16/13 at 10:12 am to Delacroix
Assuming you get paid in cash, I would not worry about it.
But, that's me, and I am not versed in tax law.
And good luck!
But, that's me, and I am not versed in tax law.
And good luck!
This post was edited on 9/16/13 at 10:13 am
Posted on 9/16/13 at 11:01 am to Delacroix
I'd imagine the $50,000 would be added as taxable income for the year in the simplest example, so if you made $50,000 at your job and won the contest, your taxable income for the year would be $100,000. You'd then pay the tax rate as if you earned that much this year.
Taxes are fun.
Someone correct or expand upon the above please.
Taxes are fun.
Someone correct or expand upon the above please.
Posted on 9/16/13 at 11:10 am to Teddy Ruxpin
In the early days of the Louisiana Lottery my dad would pick up losing scratch-off tickets from gas station ashtrays. During the same time he was also a pretty heavy gambler who would do pretty well playing blackjack and craps - enough to where he had a W-2G for gambling income filed through the casino during one lucky, drunken trip. I looked at his 1040 that year and coincidentally enough he also reported a gambling loss for the exact same amount. If he ever got audited he had a moving box full of losing scratch-offs for them to look through. 
So yes, you should report the income on the W-2G but you, or a good CPA, could also figure out a way to minimize the actual impact.
So yes, you should report the income on the W-2G but you, or a good CPA, could also figure out a way to minimize the actual impact.
This post was edited on 9/16/13 at 11:12 am
Posted on 9/16/13 at 12:11 pm to Anfield Road
quote:
You may deduct gambling losses only if you itemize deductions. However, the amount of losses you deduct may not be more than the amount of gambling income reported on your return.
This is the only thing I remember from my Income Tax class in college.
Posted on 9/16/13 at 3:16 pm to Delacroix
These are the results of $20 a entry, CFB Bowl Game pool I participate in. Nobody ever receives a 1099, so no one reports it. 17-5 usually wins, if you win the tie breaker. We also have a March Madness with fewer players.
Another year's contest is over and the results are in:
1st Place: Ken Hawk $10,188.00 (60% of the pot)
2nd Place: Alex Kapres $3,396.00 (20% of the pot)
3rd Place: Billy Hargett $1,698.00 (10% of the pot)
4th Place: Michael Uilkie $1,018.80 (6% of the pot)
5th Place: Brett Henry $679.20 (4% of the pot)
CONGRATS, guys!!!
Another year's contest is over and the results are in:
1st Place: Ken Hawk $10,188.00 (60% of the pot)
2nd Place: Alex Kapres $3,396.00 (20% of the pot)
3rd Place: Billy Hargett $1,698.00 (10% of the pot)
4th Place: Michael Uilkie $1,018.80 (6% of the pot)
5th Place: Brett Henry $679.20 (4% of the pot)
CONGRATS, guys!!!
Posted on 9/16/13 at 3:59 pm to GaryMyMan
Hanging out near the high stakes window at the track is a great idea.
Posted on 9/16/13 at 4:49 pm to Delacroix
quote:You owe taxes on it as income.
I'm in a large contest with hundreds of entries that could bring the pot to nearly 50k assuming there's only one winner. I probably won't win it but I was just curious as to what the process would be if someone would win that much money and an estimate on what the taxes would be.
quote:
Not sure if this is relevant info or not but the contest is organized by a friend, so it's not through a major gambling organization or anything like that.
If the contest is not legal, the 5th amendment gives you the right to not claim the income - however, you must positively assert it - that is, you must inform the IRS you have unreported income but you are not reporting it based on your rights under the 5th amendment.
If you simply do not report it, you are a tax cheat.
EDIT- upon further investigation I've found out you still need to report the income, but if the source is illegal you can assert the 5th amendment and not reveal the source.
LINK
This post was edited on 9/17/13 at 6:28 am
Posted on 9/16/13 at 4:51 pm to CHSBears
quote:
Nobody ever receives a 1099, so no one reports it.
Then everyone with gains is a tax cheat.
Posted on 9/16/13 at 7:55 pm to SpidermanTUba
quote:
Then everyone with gains is a tax cheat.
Yes, and the Aggie fan just posted (for the world to see) the results of his football poll with names and amount won.
Posted on 9/16/13 at 9:33 pm to SpidermanTUba
quote:
that is, you must inform the IRS you have unreported income but you are not reporting it based on your rights under the 5th amendment.
Wait, so basically you say to the IRS, "I made money but not going to tell you or pay taxes on it"?
Posted on 9/17/13 at 6:24 am to Blakely Bimbo
quote:
Yes, and the Aggie fan just posted (for the world to see) the results of his football poll with names and amount won.
Yet another example of life imitating Aggie jokes.
Posted on 9/17/13 at 6:28 am to GenesChin
quote:
Wait, so basically you say to the IRS, "I made money but not going to tell you or pay taxes on it"?
Ooops - I looked it up, you DO have to tell them the amount you made - you DON'T have to tell them the source if the source is illegal. However, you must positively assert the 5th amendment to avoid telling them the source.
(see link above)
Posted on 9/17/13 at 8:52 am to Blakely Bimbo
Clearly he did that on purpose.
Posted on 9/17/13 at 9:26 am to CHSBears
quote:
CHSBears
Posted on 9/17/13 at 4:28 pm to SpidermanTUba
quote:
Ooops - I looked it up, you DO have to tell them the amount you made - you DON'T have to tell them the source if the source is illegal. However, you must positively assert the 5th amendment to avoid telling them the source.
So why doesn't Walter White do this instead of laundering it through A1 Car Wash?
Posted on 9/17/13 at 6:05 pm to CHSBears
Way to be your typical butthurt loser faggie.
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