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If you win 10,000.00 cash in a lottery type of ...

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If you win 10,000.00 cash...
If you win 10,000.00 cash in a "lottery type" of contest do you have to pay taxes on it?
Submitted: 12 years ago.Category: Tax
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Answered in 3 minutes by:
10/16/2005
Tax Professional: Tammy F., Not an active Expert replied 12 years ago
Tammy F.
Tammy F., Not an active Expert
Category: Tax
Satisfied Customers: 9,168
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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.

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Customer reply replied 12 years ago
Reply to Tammy Falkner's Post: My sister in law was told she did not have to, Let me explain tickets were bought at 10.00 a piece and believe this or not a cow was released into a field and if he did "his Business" on your number you would win 10,000. Well, it happened and she won. What is the tax percentage?
Tax Professional: Tammy F., Not an active Expert replied 12 years ago

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!

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Customer reply replied 12 years ago
The payor did not get her social or withhold anything. Where does that leave her?
Tax Professional: Tammy F., Not an active Expert replied 12 years ago

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.


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Customer reply replied 12 years ago
Thanks so much for your help, but one other thing How would the IRS know? Would theorganization report this? i promise last question..
Tax Professional: Tammy F., Not an active Expert replied 12 years ago

Yes. The organization would report it. She is responsible for accounting for it even if they don't.


Don't forget to accept my answer if it was helpful to you.

Tammy F.
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Satisfied Customers: 9,168
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Customer reply replied 12 years ago
Thank you
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