Do you have to pay social security taxes on winnings?

[miri]

Just say you won a Xbox 360. What taxes are owed on it?

Federal
State
Social Security?

Since your employer doesnt pay half of the social security tax since it is a winning you have to pay over 15% just on social security taxes? Then federal and state? So if you win a $400 Xbox 360 your gonna have to pay like $150 in taxes?

 

[kranky]

You'll only have to pay Federal and State income tax, not Social Security, Medicare, etc.

And you should look around to find the cheapest price you could have bought one for, and use that as the value for tax purposes. It's not required that you pay taxes on the full MSRP since that's not what you would have paid if you bought it yourself.

 

[Rubycon]

Only if they hand you a W2G and that usually isn't filed with such a low winning amount. What is that prize worth?

 

[acemcmac]

uh.... I'd just not report it...

mabye that makes me a bad american

 

[KLin]

Originally posted by: acemcmac
uh.... I'd just not report it...

mabye that makes me a bad american

quoted and sent to taxabuse@irs.gov.

 

[habib89]

do you really have to report it when you win an xbox? what if i won a pen? what about when you win a free burger with purchase of another burger? do you have to pay taxes on the free burger?

 

[spidey07]

Originally posted by: habib89
do you really have to report it when you win an xbox? what if i won a pen? what about when you win a free burger with purchase of another burger? do you have to pay taxes on the free burger?

I don't know, but I think so. Of course it could be different for a prize vs. gambling wins/losses.

unforunately I have to itemize wins/losses every year.

 

[EagleKeeper]

If the prize value is under $1200, it is not usually reported to Uncle. Above that, it must be reported.

The tax laws make no distinction between gaming and prizes. It is still un-earned income.

That does not excuse you from reporting it though.

 

[Drakkon]

http://www.bankrate.com/brm/itax/edit/news/stories/news_012600.asp

Really the irs is only going to tax you for gambling income or major prizes...a $400 xbox i doubt the'll track ya down...otherwise all those guys that got free ipods not too long ago would be being hunted down too

 

[spidey07]

Originally posted by: EagleKeeper
If the prize value is under $1200, it is not usually reported to Uncle. Above that, it must be reported.

The tax laws make no distinction between gaming and prizes. It is still un-earned income.

That does not excuse you from reporting it though.

Yeah, I think that depends.

At the horse track, any single bet that wins over 600 bucks you have to sign a w2-g and present your social security card.

At the casino - its usually slots and single bets that win over 1200 (had to fill out a few).

At the casino - I asked the boss the other day at what point is winnings reported and he said "it isn't on table games"

This of course could all vary by state, as the state wants their cut as well.

I have to keep very close tabs on my winnings/losses.