How much money does the government take out of online contest prize money?
Posted by admin @ Monday, Mar. 30th 2009
WhiteWood asked:
Yeah, so I’m a filmmaker who enteres ALOT of online film competitions for money. I hear ALOT of the time that the amount that they say you can win is never the amount you get because they take taxes out. But I have NO IDEA how much money that is. Is there an online calculator for that or something? And when they DO take it out, do they give it back during tax return season?
Yeah, so I’m a filmmaker who enteres ALOT of online film competitions for money. I hear ALOT of the time that the amount that they say you can win is never the amount you get because they take taxes out. But I have NO IDEA how much money that is. Is there an online calculator for that or something? And when they DO take it out, do they give it back during tax return season?
Posted in News
April 2nd, 2009 at 4:03 am
The income is fully taxable as ordinary income. You add it to your other income to determine your total tax liability. If any money is withheld from it by the payer it will usually be withheld at 25%.
Any money withheld will be reflected on the Form 1099 that you receive and you’ll add that to your other withholdings from any Forms W-2, etc. on your tax return.
Whether you get any of it back or not will depend upon your total tax liability and total withholdings. You might get some back or you might owe, depending upon how the numbers crunch out.
April 4th, 2009 at 5:34 pm
The prize is taxed as ordinary income, and anything they withheld is shown as withholding on your tax return. It would be applied to the tax you owe, and if more was withheld for the year than your total tax, you’d get the extra refunded to you.
April 7th, 2009 at 5:28 pm
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