Though I’ll add my name to the peanut gallery which says that we get taxed when we have to work for money, and taxes on windfalls should be at least as high. So the good news is the median person can knock 10% of the value of the car off their taxes, relative to your calculation. Taxable income between 8926 and 36,250 is taxed at 15%, then it goes to 25% until you’re at 87000 and change. resident’s 43,200 income = 33,200 of taxable income. For FY2013, the personal exemption (3900) + standard deduction (6100) = 10,000 subtracted from your income to get your taxable income. Yeah, that’s a lot of taxes, though the average Californian would be in the 15% bracket, not the 25%. (If you have nine grand to drop on a car, go out and buy yourself a car!) I’m very happy and extremely thankful for my day on The Price is Right, but I’ll never stop thinking it’s funny that people trivialize a tax bill of $9,000ish as though it’s totally nothing (and that everyone could still easily keep this new car) – just because it’s a bill from something fun as opposed to traditional income. I will say that in our scenario, though, the government could easily come out the same or ahead of the winner on the actual net winnings after selling prizes for depreciated values and such. And even after selling the car for a depreciated price (since it had previously been owned by me – even if only for double digit miles), I still made thousands of dollars (even after the tax bill).
#Price is right prizes free
So this idea that “only having to pay the taxes still leaves you with a practically free car”… I don’t know how other people feel, but to me $9,000 is not practically free.Īgain, I’m very thankful. But that’s starting to get toward the price for which you could actually buy a car in the first place. (I’m not a tax professional, nor have I done taxes for my Price is Right year yet, since we are still in it.))Īnyway, in a pretty safe-ish hypothetical range, you’re paying about $9,000 for your car.
And I’ve heard the sales tax part of it could, in some circumstances, count as some sort of deduction or something. (And, I will concede it could be less if someone has enough deductions, credits, etc. This would easily be more for someone in a higher income bracket – or for someone who wins a more expensive car and goes on to win a big showcase, therefore getting pushed into a higher tax bracket.) There, you’d be in the 8% bracket and pay $1680 to the state. So, with this example, we’re up to paying $5,250 in federal taxes. That would mean your game show earnings would be taxed at the 25% rate. For argument’s sake, let’s go with the median income in Los Angeles. of this document states the median income for a single person in Los Angeles – $43,200. I don’t know what bracket everyone’s going to be in. So, I will be taxed on an extra $21,0008 of “income,” but obviously I can’t just take the thousands of dollars of taxes out of physical, non-cash-money-prizes – unless I sell the stuff I won (which I did).įirst, we start with sales tax. Of my $21,008 in winnings, only $96 of that was actual money. To be clear, you are taxed on the value of whatever you win. Taxes definitely prohibit many people from keeping prizes they win (or going on trips they win). However, I also think it’s a little silly how people marginalize the taxes for game shows winners.Īs I said, there’s this “‘wah wah, poor me’ – Hey, buck up, you won on a game show!” attitude all around the internet if any past winner even dare utter the word “taxes.”īut, taxes are very real. I adore game shows, and anything I win truly is a lovely bonus. (I do agree with that part of the sentiment from the above comments I mentioned.) I don’t want to sound ungrateful in the least. Why? But now that everyone is talking about it with me, let’s go for it. I didn’t get involved in any of those discussions, because really. “A brand new car, and I only have to pay the taxes?! Sign me up!” “How dare you complain about taxes when it’s all just a bonus to you?!” I saw so many comments by people with this angry attitude toward game shows winners. The night I won, I started googling information on what the taxes would be like on my prizes. So, let me take a post to talk about the taxes – since that seems to be the big issue. I’ve been getting a fair amount of comments/emails and such. (*Bows to applause*) Yes, thank you, thank you. In case you haven’t heard, I got linked from Yahoo! Shine yesterday, and now I’m getting thousands of hits.
#Price is right prizes series
Sorry to anyone invested for interrupting my series on breaking into working in television.
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