Some people asked for a follow up post to my one about taxes on game show winnings. Since it’s tax day, let’s do it!
I had the privilege of writing a check with my taxes for the first time this year. I always claim zero deductions on all start work paperwork because I never want to owe at the end of the year. (Thankfully, I won the car back in March and had plenty of time to plan. So, we all saw it coming.)
Here are the solved mysteries we were waiting to hear about:
– Selling the car (and obviously taking a loss since no one will pay sticker on a car previously titled to someone else) does not count as a capital gains loss. (I know. It’s a super bummer. You don’t have to tell me! I asked multiple sources, ’cause it seemed to me that that should’ve been a thing… But alas, it was not.)
– Even the huge sales tax bill (over $2,000) didn’t really help me. You can, in fact, claim your sales tax – but only if it is more than your state/local income tax (which the sales tax on the car was not, for me). However, I was told that had I saved every receipt from the year, I could’ve added all sales taxes from all receipts to the car’s sales tax and then hopefully come out ahead with sales tax.
So, I suppose that’s perhaps something to think about doing the next time you win a car on a game show…
(Again, I couldn’t be more thankful that this is the “problem” I had this year.)
I think that’s everything, right? It played out the way we expected. I did in fact get a form from TPiR, and had to claim my winnings as other income, paying taxes accordingly. So, there you have it.
If I’m forgetting to mention anything, or you have any questions, please let me know!