How should raffle winnings be reported?

August 22, 2011

From:  Christina
Date:  Fri, 24 Oct 2008

Hello:

A company holds a raffle for the United Way. Employees buy raffle tickets and win various prizes, such as cameras, beauty baskets and IPODs. Should the winnings be reported as taxable on the employee’s W-2 statement, or should they otherwise be reported on the employee’s income tax returns?

Thanks.

Have a good day,
Christina

Answer

Date:  4 Nov 2008

Hello Christina,

Prize winnings aren’t wages and so shouldn’t be reported on Form W-2.

Prizes with an aggregate value of $600 or more should be reported by the sponsoring organization on Form 1099-Misc.

Prizes are taxable income and should be reported as other income on Form 1040.

Good luck!


Mike Gray

For answers to new questions, subscribe to our newsletter, Michael Gray, CPA's Tax & Business Insight by filling out the form below.


Home    Newsletter Archive    Introducing Michael Gray, CPA    Articles    Tax FAQ   Need Help?    Other Links


Michael Gray, CPA
2190 Stokes St. Ste. 102
San Jose, CA 95128
(408) 918-3162
FAX: (408) 998-2766
Hours: 8am - 5pm PDT Monday - Friday

Find us on Facebook
Follow me on Twitter
Connect on LinkedIn
Connect on Google+
Our Blog

Sign up for our free monthly newsletter,
Tax & Business Insight,
for the latest tax news!

subscribe html
unsubscribe text only

We respect your email privacy!