Raffle Prizes & Taxes

[Pumbaa_]

Is there a $$ amount of winnings that you need to report to the IRS? If you won $1000 in a United Way raffle , is this amount reportable?

Thanks!

 

[klj27]

Yes, you should get a 1099.

 

[MickeySP]

I believe here in MA it is $600.00 but you can claim losses if you keep losing tickets

 

[Cheshire Figment]

Technically "All Income from all sources, unless specifically exempted by law, is subject to taxation under the Internal Revenue Code".

For items such as raffle prizes, the person running the contest is required to provide a 1099-MISC if the amount of a person's winnings are $600 or more, but there is nothing to preclude issuing one for a smaller amount.

And the following is directly from the IRS web site:

You may deduct gambling losses only if you itemize deductions. Claim your gambling losses as a miscellaneous deduction that is not subject to the 2% limit on Form 1040, Schedule A. However, the amount of losses you deduct may not be more than the amount of gambling income reported on your return. It is important to keep an accurate diary or similar record of your gambling winnings and losses. To deduct your losses, you must be able to provide receipts, tickets, statements or other records that show the amount of both your winnings and losses.

Mike (CPA Retired)

 

[jlewisinsyr]

An organization that I sit on the board just ran into this situation. We previously awarded some outstanding community individuals an award of $500, which was behold the threshold most reported at, but recently increased the amount to $1,000. This means we will now need to file a 1099MISC for these proceeds.

 

[tvguy]

Depends on how much you paid for the raffle ticket as far as withholding.
IF I am reading this correctly, if you paid more than $3.34 for the raffle ticket, and won $1,000, no withholding is necessary.

FROM http://www.irs.gov/instructions/iw2g/ar02.html#d0e393
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2. Sweepstakes, Wagering Pools, and Lotteries
File Form W-2G for each person to whom you pay $600 or more in gambling winnings from a sweepstakes, wagering pool, or lottery (including a state-conducted lottery) if the winnings are at least 300 times the amount of the wager. The wager must be subtracted from the total winnings to determine whether withholding is required and, at the option of the payer, to determine whether reporting is required. The wager must be subtracted at the time of the first payment.

The requirements in this section apply to church raffles, charity drawings, etc. In the case of one wager for multiple raffle tickets, such as five for $1, the wager is considered as $.20 for each ticket.
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As for if the winnings must be reported by you, I think if you win a 5 cent goldfish at the school fair, under the tax code you have to report it.

 

[Cheshire Figment]

But the question had to do with the reporting of the income, not any withholding taken out. If withholding is taken out you get a W-2-G and not a 1099-MISC.