The Motley Fool Discussion Boards

Previous Page

Politics & Current Events / Retire Early CampFIRE

URL:  https://boards.fool.com/assuming-will-h-is-married-and-files-jointly-and-34228542.aspx

Subject:  Re: How Much Tax Will Jeopardy Champ Pay? Date:  6/12/2019  4:06 PM
Author:  BruceCM Number:  881856 of 883450

Assuming Will H. is married and files jointly, and assuming his winnings all occurred in 2019 and he has no other ordinary or investment income and he takes the standard deduction, my tax computation comes out to be $840,132. But he is listed in his Wiki as being a professional sports gambler, using a complex model of predictive outcomes for various teams, so you can likely add several hundred thousand to the Jeopardy winnings. Plus his wiki said he intends to donate an amount of his winnings to a child's assistance fund in Nevada, so he'll likely itemize, as he can contribute and deduct up to 60% of his cash winnings as a charitable donation.

The article says "To make sure the IRS and California get their cut, the taxes will be withheld from his overall payout." The Media always gets this wrong. The standard W-2G withholding is 25% for game winnings. With his effective rate on these winnings at 34.1%, assuming no other income, he'll have to make up the difference in estimated quarterly payments.

https://www.hrblock.com/tax-center/income/other-income/gambl...

Yes, there are lots of cities that charge a city tax. I didn't realize how many! Here's a sample:

Wilmington, DE.....1.25%
Bowling Green, KY ... 1.85%
Florence, KY ..... 2%
Lexington, KY .... 2.25%
Baltimore, MD .... 3.05%
Most Michigan cities .... 2.5%
Kansas City, MO ..... 1%
NYC ....... 2.9% - 3.65%
Birmingham, AL ..... 1%
Ohio Cities ...... .4% - 3%

https://www.thebalance.com/cities-that-levy-income-taxes-319...

So were Will from one of these cities and assuming all his winnings were subject to the city tax, for each 1% of tax, his tax bill would go up by $24,622. So if a resident of NYC, that would be another $89,871 at the 3.65% rate.

BruceM
Copyright 1996-2020 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us