Home Business Amy Schneider’s ‘Jeopardy!’ winnings will come with a hefty tax bill

Amy Schneider’s ‘Jeopardy!’ winnings will come with a hefty tax bill

4 min read

This image provided by Jeopardy Productions, Inc. shows game show champion Amy Schneider on the set of “Jeopardy!” Schneider is the first trans person to qualify for the show’s Tournament of Champions.

Jeopardy Productions | AP

Amy Schneider has been on a “Jeopardy!” roll.

The Oakland, California-based software engineering manager recently surpassed $1.1 million in winnings on the TV game show, becoming the first woman and fourth person to break the $1 million mark. On Friday, she beat James Holzhauer’s record for the third-most consecutive games won, with 33 wins under her belt.

Whenever Schneider’s winning streak is up, she’ll likely walk away a wealthy woman.

She’ll also have to pay a large chunk of those earnings to Uncle Sam.

“She’s going to have a pretty hefty tax bill because the income she’s earned on the show is ordinary income,” said Megan Gorman, an attorney and managing partner at Chequers Financial Management in San Francisco. “She’ll be paying some of the top rates in the United States on this income.”

More from Invest in You:
If you are quitting a job, here are some options for health insurance
Here are the top jobs in the U.S. — and how to land them
This company just decided to give employees a 4-day workweek permanently

How much she’ll owe in taxes

Winning more than $1 million will place Schneider in the top tax bracket in the country. Given that Schneider is likely a single filer, that means she’ll have a 37% federal tax rate.  

In California, where Schneider lives and the show is filmed, she’s subject to one of the highest state tax rates in the country.

Again, winnings of more than $1 million will put her in the top tax bracket in the state, meaning she’ll owe an additional 13.3% — 12.3% is the top tax rate, and income of more than $1 million is subject to an additional 1% mental health services tax, Gorman said.

After Friday’s game, Schneider had won a total of $1,111,800. With that sum, she’d pay $411,366 in federal taxes and $147,869.40 to California.

That’s 50.3% of her winnings gone to taxes right away. Still, she’d take home $552,564.60.

“It’s a pretty arduous win from a tax perspective,” Gorman said.

It’s good news for Schneider that she’s a California resident, though, Gorman explained.

That means she won’t have to pay taxes on the income in two states, as other winners have had to. In that case, they’re given a credit back for the income taxes paid in California, which adds a layer of complication to filing that Schneider can avoid.

Source link

Load More Related Articles
Load More By The Texas Chronicle
Load More In Business

Leave a Reply

Your email address will not be published. Required fields are marked *

Check Also

BlackRock downgrades stocks, citing Fed over-tightening and China risk

With the Federal Reserve’s tightening cycle underway and a slowdown in China that ri…