We’ve established that you must declare ALL winnings, no matter now large or small as other income for tax purposes but some of my fellow twitter parties know that you can win so much that it get’s hard to keep track of it all. Fear not, this is an easy issue to remedy. It’s really as simple as creating a spreadsheet either in Excel on your computer or in Google documents. You want the sheep with the rows & columns since a Word document will not work as easily for the purpose of keeping track of prizes.
My column headings are as follows:
Date prize won
Actual Retail Value of the prize (which is the sponsor’s estimate of the value)
Fair Market Value of the prize (which will sometimes be different from the ARV) You only have to pay taxes on the ARV & can dispute the difference. Here’s a great post on how to do this: http://contests.about.com/od/taxesfinances/ht/FMVvsARV.htm
I have a column that tracks whether the prize was won from a twitter party or giveaway. This is just so I know how it was won.
When the prize is expected to be sent/delivered.
When the prize was actually received.
Having a spreadsheet is great & necessary for not only keeping track for tax purposes, but for fulfillment. There have been quite a few times that I’ve won something & it has not arrived when expected or even a little later. I generally allow 6-8 weeks for fulfillment, if it’s been 8 weeks and the prize hasn’t arrived then I will contact the sponsor or host to touch base. If you don’t alert someone that the prize wasn’t received then how will they know?
This post was written upon request of my fellow twitter party girl: @ktandbri