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stpmkingsns
New Member

I'll be receiving a low six figure windfall (1099-MISC) this year. Can anyone suggest how to limit my liability and what kind of Financial Professional I should seek out?

The total will be evenly split down the middle in 2 checks, one in my name, one in my wife's. We file jointly. I am currently unemployed. She makes about $60,000 annually. The money would fall under gambling, contests, game shows. Thing's like that. Assume we WON it.
4 Replies
Anonymous
Not applicable

I'll be receiving a low six figure windfall (1099-MISC) this year. Can anyone suggest how to limit my liability and what kind of Financial Professional I should seek out?

many CPA firms have CFP's.    try contacting your state's CPA society

I'm not a CFP , but there are not many options available to defer taxes



One might be if you can take the winnings in installments

another - charitable giving (this assumes you can itemize)

maybe  - maximizing retirement plan contributions

be extremely wary of tax shelters, most end up bankrupt with the investor not even getting his investment back.  some are even phony which means the IRS will disallow the losses.  so not only won't you reduce your taxes you will lose your investment.     then the question becomes is it an investment loss or casualty loss, because if it's the later it's not deductible.

robtm
Level 8

I'll be receiving a low six figure windfall (1099-MISC) this year. Can anyone suggest how to limit my liability and what kind of Financial Professional I should seek out?

The only way to limit your tax liability would be to have a very large amount of tax deductions (which isn't very likely). If you want to consult a tax advisor, make sure he is a registered CFP (certified financial planner). Consult your local phone book or do a search on the internet for 'Local CFP'. Also you would need to make estimated tax payments on the six-figure amount unless you can have them withhold a certain percentage for taxes, both federal and state. For information on federal estimated taxes, go here: https://www.irs.gov/site-index-search?search=estimated+taxes&field_pup_historical_1=1&field_pup_hist...

For state information go to your state web-site (xxx.gov) and search for 'estimated taxes'.




stpmkingsns
New Member

I'll be receiving a low six figure windfall (1099-MISC) this year. Can anyone suggest how to limit my liability and what kind of Financial Professional I should seek out?

Thank you for the response! I spoke with someone who I thought was a CFP and he was really just about investing. That seems to be everything that comes up. Is there another subset I should look for? Like I know I want someone who is a fiduciary.
rjs
Level 15
Level 15

I'll be receiving a low six figure windfall (1099-MISC) this year. Can anyone suggest how to limit my liability and what kind of Financial Professional I should seek out?

I suggest that you need a tax professional, not an investment advisor or financial advisor. Look for an enrolled agent, or for a CPA who specializes in income tax. For tax advice you don't need a fiduciary. Tax professionals are bound by IRS ethics rules.

"Assume we WON it." - Don't rely on assumptions. Tell the tax professional exactly how you came to receive the money. Gambling is treated differently from contest or game show prizes. And your windfall might not be either of those. Let the tax pro figure out how to handle it.

If you want advice on investing your windfall, you might want to go to an investment advisor or financial advisor for that, and then you do want someone who has fiduciary responsibility. But that's separate from tax advice.
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