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HomeFinancialAmy Schneider's practically $1.4 million 'Jeopardy!' winnings has a giant tax hit

Amy Schneider’s practically $1.4 million ‘Jeopardy!’ winnings has a giant tax hit

This picture supplied by Jeopardy Productions, Inc. reveals recreation present champion Amy Schneider on the set of “Jeopardy!” Schneider is the primary trans particular person to qualify for the present’s Event of Champions.

Jeopardy Productions through AP

Amy Schneider is out of “Jeopardy!.” She made historical past on the present nonetheless.

Schneider, an Oakland, California-based software program engineering supervisor, was defeated Wednesday by Rhone Talsma, a librarian from Chicago, after a 40-game profitable streak.

Nonetheless, Schneider has notched the second-most wins of all time, developing brief solely to Ken Jennings’ file of 74 consecutive video games received. On the finish of her time on the sport present, she amassed practically $1.4 million in winnings.

With that purse, she’ll depart the present a rich lady. She’ll additionally must pay a big chunk to Uncle Sam.

“She’s going to have a reasonably hefty tax invoice as a result of the earnings she’s earned on the present is abnormal earnings,” stated Megan Gorman, an legal professional and managing accomplice at Chequers Monetary Administration in San Francisco. “She’ll be paying a number of the prime charges in the USA on this earnings.”

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The tax breakdown

Profitable greater than $1 million will place Schneider within the prime tax bracket within the nation. Provided that Schneider is probably going a single filer, which means she’ll have a 37% federal tax fee for no less than a portion of the earnings.  

In California, the place Schneider lives and the present is filmed, she’s additionally topic to one of many highest state tax charges within the nation.

Once more, winnings of greater than $1 million will put her within the prime tax bracket within the state, which means she’ll owe a further 13.3% — 12.3% is the highest tax fee, and earnings of greater than $1 million is topic to a further 1% psychological well being providers tax, Gorman stated.

On the finish of her run, Schneider had received a complete of $1,382,800. With that sum, she’ll seemingly owe greater than $471,000 in federal taxes and greater than $150,000 to California, in accordance with 2021 tax tables and assuming she takes the usual deduction.

That signifies that straight away, she’ll owe practically $625,000 to taxes and be hit with an general tax fee of greater than 45%. Nonetheless, she’ll seemingly take dwelling greater than $755,000.

“It is a fairly arduous win from a tax perspective,” Gorman stated.

It is excellent news for Schneider that she’s a California resident, although, Gorman defined.

Which means she will not must pay taxes on the earnings in two states, as different winners have needed to. In that case, they’re given a credit score again for the earnings taxes paid in California, which provides a layer of complication to submitting that Schneider can keep away from.

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