Winning Contest - Taxes

Updated on February 09, 2011
S.H. asks from Harvest, AL
3 answers

I submitted a video in a contest on Facebook for the company who makes the tonneau cover I got for my truck.

The grand prize is $1,000 and a chance to be in a commercial. That's all of the details it gives!

The contest is based on votes from other Facebook members. I JUST moved up to first place! But the contest doesn't end until Feb 28, so that could change :)

But now I'm wondering - what if I actually win??? I've NEVER won anything before!!

I assume we'd have to pay taxes on the $1,000? And I have no clue the things involved with being in a commercial??

Anybody have any clues for my curiosity? :)

I do know the company is based in California, and I'm in Alabama.... haha

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So What Happened?

Thanks!

Yes the contest is legit - through the company.

More Answers

A.C.

answers from Cincinnati on

I don't know I would trust anything like that on FB. But, if you're confident it's ok then.......

Yes. You would certainly have to pay taxes on the $1,000. I have been lucky enough to win exactly $1,000 in the past and I had to pay about 30% taxes on it. They will not take that out before giving you the check though. When you cash the check you will have to buckle down & save about $300 of it for tax time. You will receive a tax form for it next year so you can claim it as income.

No idea on how the commercial thing would work. I can only assume they would pay to come to you or pay for you to come to them to film but I'm sure the details would have to be in the fine print.

Good luck!

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L.M.

answers from New York on

Yes, you will be responsible for paying taxes on the $1,000. If you win chances are you'll get a check for the $1,000 with no taxes deducted. At the end of the year, you'll be issued a 1099G, which you will need to report on your tax return.

I don't know about the commercial part of it.

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M.M.

answers from Chicago on

Momof 2 girls is right, you will get a check and then a form that you submit with your tax return. As for a commercial, if you are chosen, you will have a contract, then you will have earnings from it, after that you will also get a tax form that you will file with your taxes. It doesn't mater where the company is based - you will pay taxes where you live. The type of tax will be differen because it will be considered lottery money and gains from entertainment industry...but that is not your concearn. You need to pay tax for the year you had gains, in case the commercial will pay later - you will file it with teh appropriate year.
Good luck.

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