How should my game show winnings be reported?
September 26, 2008
From: Joe
Date: 19 Jun 2008
I am a single part-time teacher in California. Normally I make $15,000/year. I just won $500,000 on a game show. I received a check with no taxes withheld.
Does this mean I don't owe any taxes? If not, what taxes should I expect to pay? Does FICA or self-employment tax apply?
Thank you so much for your attention.
Best regards,
Joe B. Lacosta
Answer
Date: 02 Jul 2008
Hello Joe,
Congratulations on winning $500,000!
Prizes are subject to income taxes, but not employment taxes like FICA or self-employment taxes.
A tax advisor can help you estimate your tax liabilities. That's our business!
Consider prepaying most of your California tax to get a current deduction against your federal income tax.
You also should be getting investment advice to preserve your new nest egg.
Good luck!
Mike Gray
For answers to new questions, subscribe to our newsletter, Michael Gray, CPA's Tax & Business Insight by filling out the form below.
Home Newsletter Archive Introducing Michael Gray, CPA Articles Tax FAQ Need Help? Other Links
Find us on Facebook
Follow me on Twitter
Connect on LinkedIn
Our Blog