What is: The IRS
Question: Who Else Profits from This Week’s Big Jeopardy! Championship?
The three biggest winners in Jeopardy! history return this week for a championship showdown to decide–once and for all–who is the greatest of all time.
Ken Jennings, Brad Rutter, and James Holzhauer will compete in a series of one-hour, stand-alone matches. The winner of each match will be decided by their total point score of the two games. The first to win three matches receives $1 million and, more importantly, the title of Jeopardy! The Greatest of All Time. The two non-winners will each receive $250,000.
The new champion will thicken Uncle Sam’s wallet as well as his own. As a member of the high-income tax bracket, he will pay federal income tax on his winnings at a 37% rate.
Depending upon the state in which the winner lives, state income tax will claim a piece of the pie as well.
So, next time you hit the jackpot, remember this: Prizes are taxable income (non-cash prizes too). The lesson here is, if you are lucky enough to win a game show, lottery or even a local raffle, don’t go out and blow all your winnings without first putting some of it aside to pay the government.
