Delta sweepstakes win up to 100,000 miles - no purchase necessary

[Side incomer]

You could enter a sweepstakes to be one of 7 winners to win up to 100,000 Delta miles. you can enter all your household members too.
here's the link: http://www.petcarerx.com/pcrx/DeltaSweepstakes.aspx?id=1761

[Yaalili]

IX. ALL PRIZE TERMS AND CONDITIONS: All winners are required to comply with any and all applicable federal, state and local laws, rules and regulations. The prize winners will be solely responsible for all federal, state and/or local taxes, and for any other fees or costs associated with the prize they receive. The winners receiving a prize valued over $600.00 will be required to sign the Affidavit, and return it within five (5) days of notification. A winner may be required to provide Sponsor with a valid social security number before a prize will be awarded for tax reporting purposes. An IRS Form 1099 will be issued in the name of a Winner. Non-compliance may result in disqualification.

[AsherO]

IX. ALL PRIZE TERMS AND CONDITIONS: All winners are required to comply with any and all applicable federal, state and local laws, rules and regulations. The prize winners will be solely responsible for all federal, state and/or local taxes, and for any other fees or costs associated with the prize they receive. The winners receiving a prize valued over $600.00 will be required to sign the Affidavit, and return it within five (5) days of notification. A winner may be required to provide Sponsor with a valid social security number before a prize will be awarded for tax reporting purposes. An IRS Form 1099 will be issued in the name of a Winner. Non-compliance may result in disqualification.

If they're giving you a 1099 valuing miles at $0.028/mile, then taxes on the miles can end up being more than what these miles are worth...

[Dan]

If they're giving you a 1099 valuing miles at $0.028/mile, then taxes on the miles can end up being more than what these miles are worth...

They're valuing them at 2cpm according to the rules.
So at a 33% fed+state+local marginal tax rate you'll get a $2,000 1099 and owe $660 on 100,000 miles.

[AsherO]

They're valuing them at 2cpm according to the rules.
So at a 33% fed+state+local marginal tax rate you'll get a $2,000 1099 and owe $660 on 100,000 miles.

My taxes are more like 40%  fed+state+local...

If the $2,000 bumps you to a higher tax bracket then you're going to be paying the bracket difference for all of your income.

[Dan]

But if it bumps you to a higher tax bracket then you're going to be paying the bracket difference for all of your income.

Nope, common misunderstanding.
Marginal rate means that only earnings in the higher bracket are taxed at the higher rates.
Everyone pays the same lower rates in each bracket and as it climbs up you pay the higher rates on earnings within each higher bracket.

[AsherO]

Nope, common misunderstanding.
Marginal rate means that only earnings in the higher bracket are taxed at the higher rates.
Everyone pays the same lower rates in each bracket and as it climbs up you pay the higher rates on earnings within each higher bracket.

Thanks for teaching me something new. At a 40% tax rate, I'm going to have to pass on this sweepstakes.

[APoshiterYid]

If the $2,000 bumps you to a higher tax bracket then you're going to be paying the bracket difference for all of your income.

Even our beloved government is not backward enough to create a system that you would lose money by making money. There is no way that if you made 199,000 you would be taxed 34% and then with those extra $2k putting you at 201,000 you would pay 38% on all of your income; you just pay that extra 4% on the last $1k.

[AsherO]

Even our beloved government is not backward enough to create a system that you would lose money by making money. There is no way that if you made 199,000 you would be taxed 34% and then with those extra $2k putting you at 201,000 you would pay 38% on all of your income; you just pay that extra 4% on the last $1k.

What you're saying makes sense. Although people do lose out (by becoming ineligible) on thousands of dollars in government handouts (e.g. foodstamps, section 8 etc.) by earning a few hundred dollars more.

[APoshiterYid]

What you're saying makes sense. Although people do lose out (by becoming ineligible) on thousands of dollars in government handouts (e.g. foodstamps, section 8 etc.) by earning a few hundred dollars more.

Right, I was barring Transfer Payments, of course. Either way, I just signed up- thanks OP!

[Dan]

What you're saying makes sense. Although people do lose out (by becoming ineligible) on thousands of dollars in government handouts (e.g. foodstamps, section 8 etc.) by earning a few hundred dollars more.

+1.
Lots of other credits and deductions do have income limits.  So it is possible to lose more money than you make by going over various thresholds.
All the more reason for a use tax system that encourages saving instead of a system that discourages higher work/production/GDP.

[Mikeoracle]

ll the more reason for a use tax system that encourages saving instead of a system that discourages higher work/production/GDP.

I am a big fan of the "Fair Tax" system. Did you ever read the book?

[elikay]

http://consumerist.com/2011/04/texas-man-loses-78-of-tax-return-after-winning-free-donut-coupons-at-houston-astros-game.html

[Side incomer]

http://consumerist.com/2011/04/texas-man-loses-78-of-tax-return-after-winning-free-donut-coupons-at-houston-astros-game.html

 
I don't know what describes better the situation.

[Deal Guy]

http://consumerist.com/2011/04/texas-man-loses-78-of-tax-return-after-winning-free-donut-coupons-at-houston-astros-game.html

Nice gesture from the Shipley owner.