Yes. You will be issues a 1099 for your winnings and will account for this amount at tax time.
Let me know if you have questions about this.
I was mistaken in my first post. Either receive a 1099 or form w-2G.
Gambling winnings are fully taxable and must be reported on your tax return. You must file Form 1040 (PDF) and include all of your winnings on line 21. For additional information, refer to Publication 525, Taxable and Nontaxable Income.
A payer is required to issue you a Form W-2G if you receive $600 or more in gambling winnings or if you have any gambling winnings subject to Federal income tax withholding.
If you have won more than $5,000, the payer generally is required to withhold 25% of the proceeds for Federal Income Tax. If you did not provide your social security number the payer may have to withhold 28%. For more information on withholding, refer to Publication 505, Tax Withholding and Estimated Tax.
Let me know if you still have questions!
That leaves her paying the taxes herself at tax time. It's taxed at her regular tax rate. She can reasonably expect to owe 1/3 of it in taxes.
Yes. The organization would report it. She is responsible for accounting for it even if they don't.
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