To report your prize winnings follow these steps.
- With TurboTax open select Wages & Income
- Scroll down to Less Common Income and select Miscellaneous Income, 1099-A, 1099-C
- On the next page, select Other reportable income
- On the page, Other Taxable Income enter prize winnings in the description.
This will put the income on Schedule 1 Line 8 of your Form 1040, as required by the IRS. You will pay state and federal income tax on the amount, but it will not be subject to self-employment tax.
You can deduct expenses related to your prize winnings up to the amount of your winnings. They will be reported on Schedule A however, if you do not itemize and use the standard deduction you will not be able to deduct your expenses.
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