The Game Show Forum > The Big Board
Taxes on winnings question
Steve McClellan:
Forgive what might be a stupid question, but why on earth would you be charged sales tax when you're not buying anything? The impression I was under is that you must declare as income the value of whatever you win, nothing more. Then again, I'm not sure--all I've ever won is cash. ;) (And no, I didn't have to pay sales tax on it.)
Brandon Brooks:
[quote name=\'gameshowsteve\' date=\'Dec 25 2003, 02:16 PM\'] Forgive what might be a stupid question, but why on earth would you be charged sales tax when you're not buying anything? The impression I was under is that you must declare as income the value of whatever you win, nothing more. Then again, I'm not sure--all I've ever won is cash. ;) (And no, I didn't have to pay sales tax on it.) [/quote]
You did buy it. Just for free.
Have you ever had a coupon for a free 2-liter drink, and still had to pay tax on it? I have.
Brandon Brooks
Steve McClellan:
[quote name=\'Brandon Brooks\' date=\'Dec 25 2003, 11:53 AM\']You did buy it. Just for free.[/quote]
No, you received it as compensation for your efforts. That's income, not a purchase.
Brandon Brooks:
[quote name=\'gameshowsteve\' date=\'Dec 25 2003, 07:02 PM\'] [quote name=\'Brandon Brooks\' date=\'Dec 25 2003, 11:53 AM\']You did buy it. Just for free.[/quote]
No, you received it as compensation for your efforts. That's income, not a purchase. [/quote]
You can argue whatever subtleties you want. I don't really care. But you have to pay taxes on what you acquire.
Brandon Brooks
BrandonFG:
[quote name=\'zachhoran\' date=\'Dec 25 2003, 09:43 AM\'] [quote name=\'cmjb13\' date=\'Dec 25 2003, 09:34 AM\'] Suppose you win $10,000 on a game show.
How much on average would you have to pay on taxes? (Average because I think it varies depending on what tax bracket you are in, no?) [/quote]
At the $10K level, it'd be roughly 30-35% of the winnings in taxes. For Million Dollar winners, from what I recall about how much the WWTBAM winners got to keep, it'd be about 45-50% of the winnings. [/quote]
That seems about right. People magazine ran an article about John Carpenter right after he won the million and they said he'd probably get about $600,000. And who better to know than an IRS agent. ;-)
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