I'm still (after years of knowing this) stunned that the IRS taxes winnings. The Inland Revenue doesn't consider gameshow winnings (and casino winnings etc) earnings. (Which is why, even when the dollar-pound exchange was better, coming 'second' on UK WWTBAMillionaire was still worth more than winning the US version. Go figure.)
But yes, if I know that the IRS considers winnings income for tax purposes then he definitely should! (You'd think the TV company would have drawn his attention to it, for a start, when handing over the money.)
Well, it's income as any other, isn't it? I'd almost make a case that winnings should be taxed more than salary, as it's "easy money". Do lottery winnings not get taxed in the UK, either? BTW, I am quite certain the TV company did tell him, a friend of ours won good money on Wheel of Fortune and had to sign the tax release before getting the money. For non-monetary gifts, they even make you meet with accountant before accepting the price, and some people are in for a shock after finding out that winning a luxury vacation to hawaii can result in a tax bill of several thousand dollars.
Yup, lottery wins are tax-free too. You do of course pay tax on subsequent income e.g. if you invest it all and live off the interest that will be taxed regularly, but if you win a million you bank a million. Lottery money, moreover, is money that has already been taxed - the pot comes solely from ticket sales and tickets are bought with already-taxed money. So taxing it again seems like it would go against some of the principles on which the USA was founded. ;-)
Having won stuff on gameshows, I can tell you it's certainly NOT 'easy money'.
Wouldn't they still need to send a 1099 of some type, or some other document? Don't casinos send a 1099G in January to people that won more than $X, where X is something significant, but definitely less than a mil. I want to say $10,000, but I'm not sure.
Wouldn't networks also have to do this?
I have 1099s on the brain, because I have to process and send them out at work...
Before I was on Who Wants to Be a Millionaire, they kept telling me I would be responsible for taxes on any winnings. I had to sign a bunch of stuff and show my social security card before being allowed to play. Toward the end of the year they sent me a letter explaining that I would be getting a 1099, because the law (or interpretation?) had changed so I was now responsible for paying taxes on the value of the plane tickets, hotel room, and meal per diem (they also sent a check at that point to cover what I would owe, since they hadn't warned me in advance that I would owe taxes if I didn't win anything). Then I got the 1099.
The whole time I was in the running, I knew that if I won a million dollars (or any dollars) I'd instantly have a third gone for taxes. I had all kinds of plans for my $670,000. Sigh.
All this to say, how do you forget you won a million dollars?!?
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But yes, if I know that the IRS considers winnings income for tax purposes then he definitely should! (You'd think the TV company would have drawn his attention to it, for a start, when handing over the money.)
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Having won stuff on gameshows, I can tell you it's certainly NOT 'easy money'.
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Wouldn't networks also have to do this?
I have 1099s on the brain, because I have to process and send them out at work...
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The whole time I was in the running, I knew that if I won a million dollars (or any dollars) I'd instantly have a third gone for taxes. I had all kinds of plans for my $670,000. Sigh.
All this to say, how do you forget you won a million dollars?!?
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