- April 24, 2024
- Posted by: legaleseblogger
- Category: Related News
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## Winning a Raffle at Work
I recently had the exciting opportunity to win a raffle at work, which included 4 baseball tickets and some complimentary food and drinks at the game. However, I was surprised to learn that I will be faced with an imputed income of $1000 on my next paycheck as a result of this win. This has brought up questions regarding the tax implications of this extra income. If I understand it correctly, I will be required to pay taxes on this $1000. Assuming a tax rate of 20%, this would mean shelling out an additional $200. This has made me second-guess the worth of accepting this prize.
I am not an avid baseball fan, and after looking into ticket prices, I discovered that regular seats for this particular game typically only go for around $30 each. This raises concerns about how the package I won is valued at $1000. The discrepancy in value has left me feeling uncertain about whether it is truly worth accepting this prize.
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****** just grabbed a
Ask whether the $1,000 includes a “gross-up,” which is common in instances like this.
What might be happening is that the package you won is actually valued at something like $650. So they “pay you” $1,000, withhold $350 of that for taxes, and then you get the $650 worth of stuff, so it doesn’t cost you anything out of pocket.
Based on my experience (as a baseball fan) it sounds like you’ve got the front row area tickets that come with a server/unlimited food drinks. You also could have gotten box seats but I doubt it.
Those must be some really nice seats.
According to section 132, an employer may provide an employee with “occasional tickets to a theater or sporting event” on a tax free basis. This is considered a de minimus fringe benefit.
Are these tickets “regular seats” though? Different seats have different values. You can’t equate all seats being $30.
Tickets in that price class are less about the game and more about the premium experience with the nicer seats/box, actual food, decent drinks, etc. That’s why they’re valued so much higher than random 4th balcony seats. But if you don’t care, that’s fair. The tax question, yes, you’ll see that as income like any other income so would affect your taxes just like an extra $1k in wages would.
Interesting.
I’d heard that some businesses do this, but mine never did.
During my time at a company with a bunch of season tickets/seats (and a suite) to our local NBA team, they’d give them away to employees when not used for customers.
The tax implications were never passed on to the employees – and they really didn’t track who ended up with tickets.
I’m pretty happy because I once sat down and calculated that the overall face value of the tickets I received during my employment there was well into the 5 figure range.
So hopefully they gross it up for you.
Everytime my job gets me tickets they are VIP suites. Tickets cost a lot. Plus they comp unlimited food and drinks.
I’m guessing the tickets are expensive.
I also don’t get taxed on them though so I don’t know
I would ask about the details. Because my cousins job would do this and it was club level box seats with free premium parking, food and booze. Worth it for the fun experience.
Since you’re asking the generic internet hopefully you’re open to some generic input…
Don’t over think it. Go to the game, have a good time. Drink, eat, and then enjoy the perk offered by the company. The value isn’t monetary, as in the cost of the tickets, but in the accolades and recognition for being chosen and having the “company paid experience”.
Some minor bump in your tax witholdings is just gonna come back to you when you file/get your return.
But seriously, coming from a decade down the road, don’t take everything so seriously.
Can you not sell the tickets?
If you sold them for $500-800 you’d still come out ahead
I am a baseball fan But if it were a hockey game a sport I don’t follow I’d go for the cultural exposure AND as alluded to above get some FaceTime with the suits. It always helps.
Don’t be a dweeb and go to the game. Worry about taxes later
Wow. Just came here to say I’ve never heard of a gift being counted as income. That’s wild.
What kind of raffle is this? You should decline in writing so someone else has to deal with that crap.
Yeah, that’s an odd one. A couple of people got gifted box seats at a Rockies game from my hospital once and they covered all costs.
I only experience it in relation to life insurance benefits, but I believe imputed income isn’t taxed like that – it’s likely more like a $50ish hit.
Although it’s weird to me that tickets you won in a work raffle are being treated as an alternative compensation, which is what imputed income is meant to deal with.
They’re “worth” $1000 because that way your employer can say they gave away a $1000 prize and write off a larger amount than the $120 they would cost.
As someone who’s not a baseball fan that went through something similar, just go to the game. Those are some expensive tickets that probably include buffet and unlimited drinks with some pretty nice seats. The experience is absolutely worth it. Plus if you got suite tickets and your bosses will be there and you sold the tickets to someone else, that will be awkward.
Hell yeah. You’re in for a great time.
$30 for “regular” seats? Define regular, and is this a MLB game or a college/minor league game because if it’s MLB unless the seats are up in the nosebleeds they aren’t $30, and probably even more than that up there too
But either way if you aren’t a fan pass on them
Dude, any life experience is worth the income.
Getting tickets to an event you’re not a big fan of is getting a chore. You still have to get to the game, park, fight a crowd both ways, etc.
Not worth if you have to pay anything.
Or just go to the game and have a blast. Gran some food and drinks, invite a friend, someone special, etc, make the best out of it and stop worrying about taxes for a day. Life is more than money.
We add things like this as “non cash wages” and it will make your gross W2 wages increase but it will not make you pay more taxes. We may take Medicare and Unemployment but not federal/state.
ask your employer to tape them to an award. i got a plaque once with a bunch of silver bars liquid nailed to the back. never got taxed. CPA said it’s a loophole.
yes, hello, you’re from the irs?
Only asshole employers do this. Had a company once give out gift cards for Xmas, only to add it to our income so they took taxes out. I threw the cards on the owners desk and told him to keep the $50. He needs it worse than me. And quit. Followed by many others.
Tell them you don’t want them then. I wouldn’t want to pay taxes on a prize I couldn’t care less about.
Invite your friends, say $75 for all you can eat food and drinks and I am sure they will be down.
I won a $1,500 Mariott gift card from my work once. It was great but they didn’t tell me I would be taxed – found out when my next 2 paychecks were hundreds of dollars lower than they should’ve been 🙂 good times
So you didn’t win anything. You got billed a grand