if u win a prize over 500 dollars like 982 bucks i won a dell and i was told in the rules i may possibly get a w2 1099 form. do u know how much taxes i would have to pay for the prize and do u have to pay the taxes if u dont got a big income.
2006-08-31 17:34:08 · 7 answers · asked by Anonymous in Politics & Government ➔ Government
Taxes are based on your total income so if you get a 1099 you would have to include that amount as income. It will also be reported to the IRS so they will know if you don't report it.
2006-08-31 17:37:39 · answer #1 · answered by EMAILSKIP 6 · 0⤊ 1⤋
Dear RAJ: The employer has the option of issuing a W-2 or a 1099. It would have been nice if the employer had informed your parents that he was going to pay them this way. If you are paid with a 1099-MISC you will need to file form Schedule C and Schedule SE. All income and expenses are listed on Schedule C. Schedule SE (self employment tax) is computed at the rate of 15.3% of income., If your parents did not anticipate this type of payment they may have a large amount due to the Federal Government. Federal income tax must also be calculated on the 1099 income. This advice was prepared based on our understanding of the tax law in effect at the time it was written as it applies to the facts that you provided. Click on my profile to read more. Errol Quinn Enrolled Agent Master Tax Advisor.
2016-03-27 03:01:51 · answer #2 · answered by Lori 4 · 0⤊ 0⤋
A w-2 and a 1099 are two different things. Your taxes are based on total income, gifts, prizes, anything considered taxable income. So it is not possible to answer how much you would pay for one individua thing. You also need to take into consideration dependents and deductions.
2006-08-31 17:39:09 · answer #3 · answered by Wilkow Conservative 3 · 0⤊ 0⤋
The 1099 is a statement of income, how much you earned or got (or the dollar equivalent of what you won).
You just add that value in as part of your non-wage income, just like tips or independent consulting, following the instructions on the form.
2006-08-31 17:38:28 · answer #4 · answered by coragryph 7 · 0⤊ 1⤋
Yes,. Unfortunatly. You have to pay the taxes on what the gift was worth. They will send you a tax form that states the total and you will deduct that from your refund. If you get one back. Otherwise you have to add it to your total income for the year. Yea it's nice to win stuff, but you always get the short end of the stick when it comes to uncle sam!
2006-08-31 17:38:23 · answer #5 · answered by RACHEL 2 · 0⤊ 1⤋
Just turn it in with your income tax return and let Uncle Sam take what he wants.... if you don't he will hurt you.
2006-08-31 17:38:48 · answer #6 · answered by Anonymous · 0⤊ 1⤋
You should really call you local IRS to beable you get the correct answer, I can't imagine if you didn't report it that anyone will do anything, but if you would feel better call the IRS.
2006-08-31 17:43:56 · answer #7 · answered by S F 1 · 0⤊ 1⤋