At the end of the year, do you have to file it on your income tax? What if you do not hold a job at all that year, but still win a sweepstakes for like $5,000?. What do you do?
2007-11-03 17:23:51 · 7 answers · asked by KeyKey S 2 in Business & Finance ➔ Taxes ➔ United States
I won it through my school!!!!! It wasn't a scam. What should I do????
2007-11-03 17:43:41 · update #1
You did not have a job and are a student.
First, I assume you are unmarried and can be claimed as a dependent on someone's tax return.
You are required to file a tax return. Your filing status is Single with zero exemptions. Your standard deduction is $850.
File Form 1040 showing $5,000 of other income (Line 21 for 2006).
You will owe $415 in federal income taxes. You may also be required to file a state tax return and owe state income tax.
Second, if you cannot be claimed as a dependent on anyone's tax return, then the other answers are fine. Your standard deduction is $5,350 for 2007 and you would owe no tax. I recommend you file your return anyway since the IRS will be receiving notice of your win.
2007-11-04 01:30:42 · answer #1 · answered by ninasgramma 7 · 1⤊ 0⤋
You FILE as miscellaneous income as the other answer stated, HOWEVER, since it's only $5,000 and the standard deduction AND the expemption (on the federal return) would be MORE then that, you'd end up owing NO TAX... you'd also owe no tax on the State Return because the standard deduction for the State return is ALSO more then the $5000. IF, however you were to win MUCH more then say $10,000, you would more then likely owe taxes on that.
2007-11-04 00:34:20 · answer #2 · answered by LittleBarb 7 · 0⤊ 0⤋
It's taxed as ordinary income. If it was for $5000 and was your only income for the year, you wouldn't be required to file or to pay tax on it.
2007-11-04 00:37:26 · answer #3 · answered by Judy 7 · 0⤊ 0⤋
The winning is your ordinary income. If your total income (including sweep-stake income) exceeds filing limits, you must file your return.
For Single (and non-dependent), the filing limit is $8,750.
2007-11-04 00:33:18 · answer #4 · answered by MukatA 6 · 1⤊ 0⤋
you have to claim it as income.
I hope this wasnt an online sweepstakes.. if so, and you get a check in the mail.. please put that check on at least a 14 day hold as there are alot of scams and counterfiet checks out there.. espeically if they tell you that you need to send a portion of it back to them.. becareful!
2007-11-04 00:34:15 · answer #5 · answered by collctor2 3 · 0⤊ 0⤋
It is reported as miscellaneous income and taxed at your ordinary rate.
2007-11-04 00:26:29 · answer #6 · answered by Anonymous · 0⤊ 0⤋
Don't blow it all, save some for Uncle Sam.
2007-11-04 10:37:13 · answer #7 · answered by franc91 2 · 0⤊ 0⤋