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Whether you're in the crowd waiting to "Come on Down!" and play The Price is Right or beating Jeopardy! contestants to the answers, you're probably dreaming of what you could do with all that cash and prizes. But TV game show winnings may be smaller than they appear.
Just like lotto winnings, Olympic medals, home run balls, and even free doughnuts, if you've won something of value, the IRS is going to want their share. Does that apply to game show winnings as well?
Even Jeopardy! legend Ken Jennings had to pay almost half of his record $2.5 million in winnings to the tax man. For the IRS, game show prizes are the same as gambling income, which includes "winnings from lotteries, raffles, horse races, and casinos [as well as] cash winnings and the fair market value of prizes such as cars and trips."
What if I won some money at a powwow? You still have to pay. But what if I won a trip for four at my church raffle? Doesn't matter; pay up. A good rule of thumb is that if you receive something of value, that's considered income and the IRS generally considers any income taxable.
If you've won anything on a game show, be it cash, car, or tasteful patio furniture set, you'll probably be filling out a Form W-2G. The form is simple enough -- you just need to input who paid you, what they paid you, and when. The game show staff should be able to provide you with all of that information.
And just in case you're thinking maybe no one will notice an extra few thousand dollars in your bank account or the shiny red Corvette in your driveway, remember two things:
So even though the feds may take a chunk of change out of your prize money, it's better to pay up front and get it over with than have the tax man chasing you down for the government's slice of the pie. And an experienced tax attorney can help your sort it all out.
Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.