If your winnings are fixed or cannot be converted into cash, you should always confirm the value of the prize you would receive from the game producers and staff.
Cash winnings may sound like a good deal — but they should really come with a disclaimer. These winnings are still subject to federal income tax, and they may even put you in a higher tax bracket.
This means you will need to make sure your tax return is accurate when it comes time to fill out the proper IRS form s. You will also have to pay state income tax — and your total taxable income will likely be very high — leaving you to pay the highest amount of taxes possible in all likelihood.
Two of the best examples of this are two big Jeopardy! As far as the IRS is concerned, game show winnings are really treated no differently than ordinary income. News » Tax Questions ». By Tax Desk Updated December 22, Do you have Tax Debt? How much tax debt do you have? Number of unfiled tax returns? Get Your Free Consultation! Optima does not service clients in. Read further to gain more understanding of how taxes on game show winnings work.
Taxes And Game Show Winners The disappointing truth about hitting the game show jackpot is that you will be taxed for whatever you won from it — not just cash prizes, but also tickets and merchandise. This is a little bit complicated. Essentially, you will pay tax based on your tax bracket.
There are a few paths here. One, you can take the car. This is a good option, but there are some caveats. In an interview with Yahoo! After the show, you fill out some paperwork and basically sign your life away. If you win in California, you have to actually pay the California state income tax ahead of time. Of course, winners will also have to file their regular tax returns during filing season, and the value of the items will be added to their taxable income.
This could push you into a higher marginal tax bracket. According to the AICPA, Schwartz and anyone who wins and pays state income tax as she did, will be able to claim a tax credit in his or her home state for the taxes paid in the state where the win occurred. A common question contestants ask is, can they take the value of the prize in cash?
According to another TPIR winner, the answer is, not usually unless the prize is not immediately available. Then you might be offered the cash value if you choose not to wait.
This winner said on Consumerist. For example, TPIR will only ship prizes to your home address. If you want items shipped elsewhere you have to pay extra. Schwartz lives in an apartment and could not receive the two large tables at her residence. In the end, she sold them on Craigslist for less than one-third the value. Winning is great, but game show prizes generally come with hefty costs. In the U. And they want their share. Canadian and other non-U. If you appeared on a U.
Canadian and non-U. The IRS rules for game show tax and their refunds are vague. But in general, reality show winners are taxed at the same rate as regular game show winners. Some reality show contestants have attempted to reclaim parts of their IRS withholding tax with their U. One Survivor reality show winner, Richard Hatch, neglected to pay withholding taxes on his game show prize.
He was prosecuted and ultimately convicted of tax evasion. If you lose or misplace this form, the production studio can provide you with a copy. In addition, game show winners should keep supporting documentation of their U. Old lottery tickets, race stubs, records of slot machine plays, are all considered to be supporting evidence of gambling losses.
The supporting evidence must be related to gambling losses at a US-based casino or other US gambling establishments, and must occur in the same calendar year as the game show winnings.
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