Author Topic: The taxman cometh? (Read 3510 times)

ActualRetailMike · « **on:** January 13, 2010, 08:22:22 PM »

Found this article about how gameshow winnings are taxed. Did you know that some grand prizes are awarded so rarely, they're awarded by an insurance policy?

[topic=\"0\"]Jackpot? How much contestants really take home in game show winnings[/topic]

TimK2003 · « **Reply #1 on:** January 13, 2010, 10:10:09 PM »

The taxman taketh the linketh -- does not work.

BrandonFG · « **Reply #2 on:** January 13, 2010, 10:14:30 PM »

There you go.

TLEberle · « **Reply #3 on:** January 15, 2010, 12:13:36 AM »

[quote name=\'ActualRetailMike\' post=\'234316\' date=\'Jan 13 2010, 05:22 PM\']Did you know that some grand prizes are awarded so rarely, they're awarded by an insurance policy?

[topic=\"0\"]Jackpot? How much contestants really take home in game show winnings[/topic][/quote]Yup. That link straddles the line between "almost good journalism" and "misrepresentation." They're trying to make game shows out to be the bad guy when they don't say "If you answer 15 questions correctly, you'll win $250,000 cash and $750,000 in annuity."

And the tax issue has been done to death. Income is income, and as long as there is an income tax, you'll have to pay taxes on them.

Ian Wallis · « **Reply #4 on:** January 15, 2010, 04:28:38 PM »

Quote

And the tax issue has been done to death. Income is income, and as long as there is an income tax, you'll have to pay taxes on them.

This story reminds me of one of my favorite articles in TVGuide. It was published April 19, 1975 and featured a detailed story on game show winnings and the IRS. Examples: using 1975's numbers, it states that if a person's regular wages were $9000, and they won $20,000 on a game show, they'd be taxed as if their income is $29,000 for the year, which would work out to $7702. The tax without the game show winnings would be $1331. It also talks about winners forfeiting some unwanted prizes to avoid paying taxes on them.

Even though it's age is getting "vintage" by now, it might be worth seeking out for you TVGuide collectors on the forum. It should be pretty easy to find via e-bay. I've actually got a duplicate copy of that issue I could part with, but there's a bit of a tear on the cover.

CeleTheRef · « **Reply #5 on:** January 18, 2010, 07:30:35 PM »

It also reminds me of a similar article I've read here in Italy about a man who in 1989 won the equivalent of $190,000 on primetime Jeopardy! (when $50,000 single-night wins were the norm) and what became of his winnings.

Simply put, he spent more than he actually pocketed:

declared winnings: $190,000

charity: -$38,000 (the champions had to donate 20% to charity)

20% flat tax: -$30,400

actual winnings: $121,600

Also consider that cash winnings here are paid in gold coins, and they don't sell well on the market.

In the end he got about $100,000 but he had already spent $150,000 before he knew better.
And a $50,000 debt was not pretty because the average income at the time was lower than $10,000.

At least he didn't get in trouble with the taxman because taxes are responsability of the network.

Once the host of WWTBAM joked on this, saying "Question #1 is for €500, but after taxes, fees, costs, expenses... you'll owe us €20!"

clemon79 · « **Reply #6 on:** January 18, 2010, 07:41:01 PM »

[quote name=\'CeleTheRef\' post=\'234536\' date=\'Jan 18 2010, 04:30 PM\']In the end he got about $100,000 but he had already spent $150,000 before he knew better.[/quote]
(Emphasis mine.)

No sympathy. None.

RyanCDN · « **Reply #7 on:** January 19, 2010, 06:11:03 PM »

Ahhh, gotta love Canada, how there is no tax on winnings. So that two sliced toaster you won, or the Oster Blender, no worries!

I know we joke about Canadian production and their lower prize value, but there have been some big games. Back in the early days of Millionaire, when CTV did the 2 night Canadian event, if anyone won the grand prize they would hvae pocketed more that their US counterpart, even with a really crappy exchange rate.

In general, our shows have not had the high profile prizes of US shows. This also holds true for lottery winnings, as far as I know. Lottery winnings are tax free.

I would hate to win in a Canadian lottery now, because Uncle Sam would take a portion for sure.

-Ryan

vtown7 · « **Reply #8 on:** January 19, 2010, 08:54:27 PM »

Actually, to follow up on Ryan's comment, we have seen some bigger games, mostly from French Canada. It was pretty exciting to see someone sweep up $107K in person when I saw Le Banquier taped in the summer. Paquet Voleur has had its grand prize of $100K won at least once (although no one has hit the $1M Tourney of Champs pot). And yes, it's nice that it's all tax free, not going to complain!

Games tend to work better in French speaking areas - I would imagine there would be tremendous pressure on any Canadian networks (say, CBC) to make sure if they had a game show that they would need to do a nation-wide search for contestants - with that being said, CTV one year hit 14 different cities for Canadian Idol, covering all ten provinces and one territory.

Ryan

TimK2003 · « **Reply #9 on:** January 20, 2010, 10:11:27 PM »

[quote name=\'RyanCDN\' post=\'234583\' date=\'Jan 19 2010, 04:11 PM\']I would hate to win in a Canadian lottery now, because Uncle Sam would take a portion for sure.[/quote]

I had once taken a chartered bus trip to a Casino in Windsor, ON, just across the river from Detroit. The tour guide told us that in the "unlikely" event we would win a "sizeable" amount of money, that:

a) you do get the full amount tax-free, and
b) any winnings you bring back to the US should be reported to the IRS based on the "honor system" -- the same honor system that is used when reporting things on the internet you bought "tax-free".

In other words -- screw it!!!

clemon79 · « **Reply #10 on:** January 21, 2010, 01:26:23 PM »

[quote name=\'TimK2003\' post=\'234679\' date=\'Jan 20 2010, 07:11 PM\']b) any winnings you bring back to the US should be reported to the IRS based on the "honor system" -- the same honor system that is used when reporting things on the internet you bought "tax-free".

In other words -- screw it!!![/quote]
Can you please say that a little louder, sir? And this time, directly into the flower...

Joe Mello · « **Reply #11 on:** January 21, 2010, 06:05:44 PM »

[quote name=\'clemon79\' post=\'234751\' date=\'Jan 21 2010, 01:26 PM\'][quote name=\'TimK2003\' post=\'234679\' date=\'Jan 20 2010, 07:11 PM\']b) any winnings you bring back to the US should be reported to the IRS based on the "honor system" -- the same honor system that is used when reporting things on the internet you bought "tax-free".

In other words -- screw it!!![/quote]
Can you please say that a little louder, sir? And this time, directly into the flower...[/quote]
Serves me right for eating soup next to the computer. Well done.