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Entries in Prizes (2)

Thursday
Aug092012

‘The Price Is Right’ – but the Taxes Are Wrong

Frederick M. Brown/Getty Images(LOS ANGELES) -- Oh, happy day! You’re a contestant on a popular game show – The Price Is Right, let’s say. You spin the wheel, you make the winning bid, and suddenly – ka-ching! – you’ve won the Lexus or the dishwasher or the lifetime supply of nail clippers. Pretty swell, right?

From a tax standpoint, maybe not.

Consumerist.com gives the example of a Price is Right winner (name withheld) whose haul included a new truck, a washer and dryer, an Apple computer, a poker table and a trip to Washington, D.C.

On the social news site, Reddit, the man fielded questions from people wanting to know if there was any downside to winning.

There sure was: “I won $57,000-worth of items. I had to pay around $17,000 or $20,000 in taxes.”

Some winners, he said, decline to take their prizes because they don’t want to pay the taxes.

If winners had the option of taking cash, rather than the fridge or car, it would simplify paying Uncle Sam. But that’s possible only under certain circumstances, the Price Is Right winner said.

“We won an Apple computer, and Apple doesn’t ship their items, so we got the money,” he said.

He used the cash to pay taxes on his other items.

Melissa Labant of the American Institute of Certified Public Accounts told SmartMoney that winners have to pay state and federal taxes on their prizes, just as they would on any other income.

They file a return in the state in which they won – meaning, she says, usually New York or California. Then, they claim those taxes as a credit in their home state.

But there’s a catch, she said:  If your home state has a lower tax rate, you won’t get back the difference.

Another catch: You’re paying taxes on the item’s full retail value – in the case of a car, say, on the manufacturer’s suggested retail price, rather than on the discounted price a buyer on the open market might pay. Win a really big prize, and the income might be enough to lift you into a higher tax bracket, further increasing the cost of your good fortune.

The Price is Right guy cited another reason winners sometimes say, “No thanks.”

“One guy won a $10,000 cash prize and didn’t take it because he didn’t want to pay half to his ex-wife,” he said.

Copyright 2012 ABC News Radio

Friday
Aug122011

Five Tips for Sweepstakes Success

Jupiterimages/Thinkstock(NEW YORK) -- Carolyn Wilman of Ontario, Canada, is serious about her sweepstakes. So serious that she has a nickname, the "Contest Queen," a book, You Can't Win If You Don't Enter, and a website, www.contestqueen.com, all devoted to winning things for free.

She's also one of five "sweepers," people obsessed with entering sweepstakes, profiled on the new reality show High Stakes Sweepers, premiering Sunday, Aug., 14, at 10 p.m./ET on TLC.

Wilman, 44, has won almost $250,000 in cash and prizes over the 10 years she's been entering sweepstakes, ever since she decided to turn a hobby into a full-time career.

"I worked in marketing for 15 years and found myself unemployed," she says on the show's series premiere. "I read an article about a couple who entered sweepstakes on a daily basis. I thought, 'What a great idea. I won't have to work. I'll just win for a living.'"

To win, Wilman enters an average of 100 to 300 contests per day, often enlisting the help of her 9-year-old daughter, Nicole, to get the job done.

Over the years, she's won clothes, cosmetics, kitchen appliances. She estimates she wins five to 15 sweepstakes per month, including one lucky month in which she won three trips in one week alone.

"I feel so blessed that I won all this stuff," she says.

Confident in her reign as "Contest Queen," Wilman shared these five tips with ABC News:

1. Always Read the Rules:  It's the one thing people do the least. You do not want to inadvertently disqualify yourself.

2. Visit Sweepstakes Websites:  Visit online websites that specialize in the hobby. The sites will offer links to currently running promotions, and you can sign up for a newsletter subscription listing new sweepstakes and contests.

3. Use Social Media:  "Like" and "follow" people and companies on all social media platforms, such as Twitter and Facebook, to hear about new promotions and enter contests on those sites.

4.  Enter Through Every Method Possible:  Most sweepstakes offer five entry methods: in-person, call-in, mail-in, online and text messaging. Use all five methods to maximize your odds of winning.

5.  Enter!:  Don't forget the obvious: To win, you must enter. The more you enter, the better your odds.

Copyright 2011 ABC News Radio







ABC News Radio