Tax News Oscars and the Taxation of “Swag Bags” Read the Article Open Share Drawer Share this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Pinterest (Opens in new window)Click to print (Opens in new window) Written by TurboTaxLisa Published Mar 8, 2024 2 min read The outfits are picked, parties are planned, and the votes for the 2024 Oscar winners are almost tallied. Hollywood’s nominees will gather this weekend for the 96th Academy Awards ceremony. And while most hopefuls will not be walking away with the coveted eight-and-a-half pound (yes, really) statuette…they will still have something to smile about. This year’s “swag bag” – given to all Academy Award nominees – is said to have a whopping estimated value of well over six figures. It’s not “just an honor to be nominated,” it pays! But what are the potential tax ramifications of receiving all-inclusive luxury vacations to the Swiss Alps and Saint-Barth Paradise, a microneedling device, or a 45-bottle wine fridge (to name just a few of the expensive items included in the swag bag)? For starters, the recipients will need to claim the fair market value of the bags as ordinary income rather than as a gift. A 2006 agreement reached by the IRS and the Academy of Motion Picture Arts and Sciences created this rule. Assuming the celebrity is in the highest tax bracket and a 37% rate applies, this year’s swag comes with a hefty tax price tag that could be close to $500,000 depending on the exact value of the swag bags. That may have some celebs seeing a red light rather than the red carpet. On the bright side, recipients of the goodie bags are allowed to donate the gifts to charity and receive a tax deduction, but they still have to claim the gifts as income. You may not have an Oscar nomination in your future, but any winning bets you place on Oscar nominees, as well as any other gambling, lottery, raffle, or sweepstakes winnings, are taxable income. TurboTax will ask you about your winnings and will help you every step of the way if you had a very lucky 2023. Ready for that refund? File today! Don’t worry about knowing these tax rules. No matter what moves you made last year, TurboTax will make them count on your taxes. Whether you want to do your taxes yourself or have a TurboTax expert file for you, we’ll make sure you get every dollar you deserve and your biggest possible refund – guaranteed. Get started now Previous Post E-File is Now Open: Why You Should File Your Taxes… Next Post IRS Announces Tax Relief for Hawaii Wildfire Victims Written by Lisa Greene-Lewis Lisa has over 20 years of experience in tax preparation. Her success is attributed to being able to interpret tax laws and help clients better understand them. She has held positions as a public auditor, controller, and operations manager. Lisa has appeared on the Steve Harvey Show, the Ellen Show, and major news broadcast to break down tax laws and help taxpayers understand what tax laws mean to them. For Lisa, getting timely and accurate information out to taxpayers to help them keep more of their money is paramount. More from Lisa Greene-Lewis Follow Lisa Greene-Lewis on Twitter. Leave a ReplyCancel reply Browse Related Articles Crypto Understanding Crypto and Capital Gains Work 7 Things You Need to Know About the New Business Report… Work Using Form 8829 to Write-Off Business Use of Your Home Tax Tips Roth 403(b) vs. Roth IRA: Which Should You Invest In? Life Interest Rates, Inflation, and Your Taxes Investments Essential Tax Tips for Maximizing Investment Gains Uncategorized TurboTax is Partnering with Saweetie to Elevate Hoop Dr… Business Small Business Owners: Optimize Your Taxes with a Mid-Y… Small Business The Benefits of Employing Your Children and the Tax Bre… Income and Investments Are Olympics Winnings Taxed?