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Question
I won $1000 from calling-in to a radio show. Do I have to claim that on my taxes? How do the taxes work for that?
AI accountant’s answer:
Yes, you generally need to report the $1,000 prize you won on the radio show as income on your taxes. Prize winnings are usually considered taxable income and should be reported on your tax return. The radio show or the entity that awarded the prize may issue you a Form 1099-MISC or Form 1099-NEC, which reports the amount of the prize. You should include the amount reported on that form as "Other Income" on your tax return, specifically on Schedule 1 if you're filing Form 1040 or 1040-SR. Your federal and state income taxes on the prize will be determined by your overall taxable income and your tax bracket. Depending on your personal tax situation, you may owe additional taxes on the prize winnings when you file your tax return. It's a good idea to set aside some of the winnings to cover potential tax liabilities and consult with a tax professional to ensure you're reporting the prize correctly.
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Isaiah McCoy, CPA
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