Guest Author - Sandy Lovern
It is that dreaded time of year when those of you who have won over the past year, now have to report and pay for those great prizes.
Most of the time, if the prize you won is worth at least several hundred dollars, you will get a 1099-MISC form from the sponsor. This form is used to report miscellaneous payments, of which sweepstake prizes are considered. This is one of the few times you will be required to give your social security number out because the sponsor will need it to send you your 1099-MISC form.
Sweepstake sponsors are required by the IRS Guidelines to send you a copy of the 1099-MISC postmarked by January 31, 2009. Make sure the 1099 is for the year you won the prize in. If you won a prize in the latter part of 2009, but did not receive it until 2010, then you should not receive a 1099 until 2010.
This is not an area where you want to fudge in any way. If you have not received a 1099-MISC for a prize you won with a substantial value, then contact the sponsor if you have not received it by February. Don't make the mistake of thinking someone just forgot about it. Once a 1099-MISC is issued from the sponsor, a copy is also sent to the IRS. Don't ignore this because your copy might have been lost in the mail, but the IRS will still have a copy. If you can't get any satisfaction from the sponsor, call the IRS at (800) 829-1040 or check out their website at IRS
So this is a reminder to keep all of paperwork on any contest you win. You may need it later to dispute the ARV (actual cash value) of the prize you won. You don't want to be paying taxes on a $2000 computer that you can go out and purchase for $1000. If this occurs, get three other quotes for the exact same item, and send them in to the IRS. This is called disputing an item on your Sweepstakes Taxes.
The information above is a brief summary of what is involved in reporting your sweepstake wins. Since I am not an accountant or tax expert, I advise you to check with your personal CPA or accountant, if you have any questions.
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To read more from Editor and Author Sandy Lovern, please visit
Sandy Lovern; and Sweepstakes Success
