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

Amy Schneider has been on a "Jeopardy!" roll.

The Oakland, California-based software program engineering supervisor just lately surpassed $1.1 million in winnings on the TV sport present, turning into the primary girl and fourth particular person to interrupt the $1 million mark. On Friday, she beat James Holzhauer's file for the third-most consecutive video games received, with 33 wins beneath her belt.

Whenever Schneider's successful streak is up, she'll seemingly stroll away a rich girl.

She'll additionally need to pay a giant chunk of these 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," mentioned Megan Gorman, an legal professional and managing companion at Chequers Financial Management in San Francisco. "She'll be paying some of the top rates in the United States on this income."

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How a lot she'll owe in taxes

Winning greater than $1 million will place Schneider within the prime tax bracket within the nation. Given that Schneider is probably going a single filer, which means she'll have a 37% federal tax fee.  

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

Again, winnings of greater than $1 million will put her within the prime tax bracket within the state, that 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 mentioned.

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After Friday's sport, Schneider had received a complete 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 immediately. Still, she'd take house $552,564.60.

"It's a pretty arduous win from a tax perspective," Gorman mentioned.

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

That means she received't need to 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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Professional assistance is a should

To ensure, half a million {dollars} continues to be a life-changing quantity to win, Gorman mentioned. But "it's pretty amazing how much of it goes to taxes," she added.

Still, it's essential that Schneider search tax recommendation from a certified skilled to make sure she pays her taxes appropriately. Many sport exhibits don’t withhold any portion of winnings for taxes, leaving it on the contestant to ship the right amount to the IRS.

"Hopefully Amy is speaking with her tax professional now in order to move forward with getting the right advice," mentioned Gorman.

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