HOW MUCH MONEY DOES THE GOVERNMENT TAKE OUT OF ONLINE CONTEST PRIZE MONEY?
Yeah, so I’m a filmmaker who enteres ALOT of online movie competitions for money. I listen to ALOT of the time which the volume which they contend you can win is never the volume you get since they take taxes out. But I have NO IDEA how most income which is. Is there an online electronic caclulator for which or something? And when they DO take it out, do they give it behind during taxation lapse season?
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October 24th, 2009 at 9:58 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.
October 24th, 2009 at 10:28 pm
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.
October 24th, 2009 at 11:16 pm
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