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Oscars and the Taxation of “Swag Bags”

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The outfits are picked, events deliberate and the votes for the 2023 Oscar winners will likely be tallied. This weekend, Hollywood’s nominees will collect for the 9fifth Academy Awards ceremony. And whereas most hopefuls won’t be strolling away with the coveted eight-and-a-half pound (sure, actually) statuette…they’ll nonetheless have one thing to smile about. 

This 12 months’s “swag bag” – given to all Academy Award nominees – is said to have a whopping estimated worth of properly over six figures. It’s not “simply an honor to be nominated,” it pays! However what are the potential tax ramifications of receiving luxurious holidays to Italy and Canada, facial rejuvenation procedures, or baggage units (to call only a few of the costly objects included within the swag bag)? 

For starters, the recipients might want to declare the truthful market worth of the baggage as unusual revenue slightly than as a present. A 2006 settlement reached by the IRS and the Academy of Movement Image Arts and Sciences created this rule. 

Assuming the movie star is within the highest tax bracket and a 37% fee applies, this 12 months’s swag comes with a hefty tax price ticket that may very well be near $50,000 relying on the precise worth of the swag baggage. Which will have some celebs seeing a pink gentle slightly than the pink carpet. On the brilliant facet, recipients of the goodie baggage are allowed to donate the presents to charity and obtain a tax deduction, however they nonetheless have to assert the presents as revenue. 

You could not have an Oscar nomination in your future, however any successful bets you place on Oscars nominees, in addition to another playing, lottery, raffle and sweepstakes winnings are taxable revenue. TurboTax will ask you about winnings and can provide help to each step of the best way for those who had a really fortunate 2022. Prepared for that refund? File today!

Don’t fear about figuring out these tax guidelines. Meet with a TurboTax Full Service knowledgeable who can put together, signal and file your taxes, so that you may be 100% assured your taxes are finished proper. Begin TurboTax Live Full Service in the present day, in English or Spanish, and get your taxes finished and off your thoughts. You don’t have to depart dwelling, and you may be prepared for the Oscars!

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Lisa Greene-Lewis
Lisa Greene-Lewis

Lisa has over 20 years of expertise in tax preparation. Her success is attributed to having the ability to interpret tax legal guidelines and assist shoppers higher perceive them. She has held positions as a public auditor, controller, and operations supervisor. Lisa has appeared on the Steve Harvey Present, the Ellen Present, and main information broadcast to interrupt down tax legal guidelines and assist taxpayers perceive what tax legal guidelines imply to them. For Lisa, getting well timed and correct data out to taxpayers to assist them maintain extra of their cash is paramount. Extra from Lisa Greene-Lewis

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