Sorry Academy Award Nominees, Those Swag Bags are Taxable

This year at the 85th Annual Academy Awards, the nominees received swag bags with an estimated fair market value of $168,000. As we celebrate the best of the best for their contributions to cinema in 2014, it should be noted that these swag bags will be taxable as income on the nominees 2015 individual tax return (1040). Assume the tax rate for these items is an even 30%. The estimated payment owed to the IRS (assuming no other income items) at a 30% tax rate would be $50,400. As with all high net worth individuals, this is where the rubber meets the road for 2015 tax planning. Failure to do so could mean incurring a huge tax liability for 2015 as well as penalties for underpayment of estimated tax.

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Five Stone Tax
by Five Stone Tax

Five Stone Tax is America’s trusted tax adviser, offering full-service tax solutions with the goal of making sure all of our clients pay the lowest amount of taxes legally possible. As the most effective tax representation company in America, our team consists of the best Tax Attorneys, Enrolled Agents, case managers, and administrators in the industry.

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