Monday, March 19, 2007
TAXES on wins ?
YEP THATS RIGHT YOU GUESSED IT, CANT WIN ANYTHING WITHOUT UNCLE SAM WANTING A PIECE OF THE ACTION! Last year we had to pay a DOUBLE state tax on a casino win with a NO CASH BACK from mississippi, they are calling their tax a 'service charge' now! YIKES..........
Most companies that offer prizes of value send you a 1099 or a MISC. INCOME / PRIZE WIN tax sheet to make it easy for you to know what to claim on your taxes. NOW the problem with this is that many items are valued at MORE than the current years price, at least for freelancers! :) soooooooooooo if you do win something check the ARV (what you will have to claim) and if you do find it cheaper before tax time notify the company with ALL of the information. Most of the time they will change it for you. If they don't, you can clip the add, do a screen shot etc of the EXACT ITEM (make sure of this) and the price and date (must be in a short time period of you rec'ving your prize) so that you can claim ACTUAL VALUE instead of ARV.
When you claim prize winnings you can ALSO CLAIM deductions up to the amount of your win. This includes and and all supplies that directly relates to your sweepstakes entry. FOR EXAMPLE: if you send in lots of mail in sweeps SAVE YOUR RECTS and claim it all 100% of your postage, envelopes, 3x5's etc.
LOSING LOTTERY TICKETS, BINGO , any wagers that you make for gambling and/or sweepstakes can all be deducted. DO YOU USE YOUR COMPUTER EXCLUSIVELY FOR CONTEST ENTRIES? CLAIM THAT TOO, and your INTERNET CHARGES TOO!
SWEEPSTAKE PUBLICATIONS etc...... all count
Get the picture? you don't have to take a total loss on your wins if you have expenses to get the wins!
Posted by TheFrugalFreelancer.com at Monday, March 19, 2007