Are you taxed on Amazon Giveaway prizes? Yes, you are supposed to pay taxes on winnings. Amazon has to report totals of more than $600 a year to the IRS. Are Amazon Giveaway prizes taxable income? Absolutely. Just because a company isn’t required by law to report income doesn’t mean that taxes aren’t owed. I’m not a tax professional, but the $600 ‘rule’ is a common misconception that causes lots of problems.
Amazon Giveaway asked for my social security number months ago, and I knew I the prizes would be taxed in 2017. I didn’t win any one item of exceptional value, but I won a lot throughout the year. Amazon sent form 1099-MISC for tax reporting purposes, and according to their records my prizes totaled $749.80. The total value of Amazon Giveaway prizes was entered in the ‘other income’ box. Are you taxed on Amazon Giveaway prizes? Yes. I have to pay taxes on my Amazon Giveaway prizes, and others do too. If they total less than $600 their retail value should still be reported, but I’m not going to tell anyone else what they should or shouldn’t do.
Suggested Retail Prices or Actual Prices?
When I began participating in Amazon Giveaways, host sellers were greatly inflating their suggested retail prices. They wanted their merchandise to appear more valuable or more of a deal to buyers. After all, they were the ones making those price ‘suggestions‘. They weren’t giving things away for no reason either. Giveaways are a highly effective marketing tool, if they’re done right. Amazon noticed the problem and changed the prize value rules. Giveaway hosts are now required to list actual prices instead of suggested retail. I don’t know if the Amazon Giveaway prize value total on form 1099-MISC is based on suggested retail prices or if they’re calculated according to approximate retail value. That’s a question for a tax professional or an Amazon employee.
Taxed on Hundreds of Dollars in Free Merchandise
I’m guessing that many Amazon Giveaway prize winners are in for a shock, especially those that won hundreds of dollars in free merchandise last year. Winning enough for the IRS to receive notice is new to a vast number of people. That’s because very few (if any) other sites offer the opportunity to win item after item. I can’t think of any single website right now (or in the past) with hundreds of really cool prizes up for grabs.
Are You Taxed on Amazon Giveaway Prizes?
In the Amazon Giveaway FAQs they briefly touch on the subject of social security number requests and taxes, but it’s not explained in detail, at least not yet. If enough people express a concern more info may be added to the Amazon Giveaway FAQs, but it’s up to those in charge to decide if it’s necessary.
As of 1/29/2018, question number eight in ‘Entrant questions‘ says, “If you win higher value prizes or if other circumstances apply, you may be asked to submit your tax information to Amazon for tax reporting purposes.”
Accumulated Prize Values Count as One Big Prize
Are you taxed on Amazon Giveaway prizes? Yes, and I’m not upset or the least bit surprised. Accumulating prize values fall under the category of ‘other circumstances’, even though it isn’t spelled out word for word. As die-hard Amazon Giveaway players receive their Amazon Giveaway 1099 IRS tax form, some won’t mind but others will be upset.
Amazon Giveaway is still somewhat new, and it’s going to take time for people to realize the repercussions of winning hundreds of dollars in merchandise. Accumulated Amazon Giveaway prize values are considered one big prize. It boils down to the fact that Amazon has to report winnings of more than $600 to remain complainant with US Tax Laws. I think it’s still worth playing, but others won’t see it that way. I only try for things I really want or need, but some play to win absolutely anything and everything, and for these people it won’t be worth what they’ll have to claim.