Amy Schneider ended a record-breaking 40-day winning streak on “Jeopardy,” taking home a whopping $1,382,800. Now she faces another challenge: figuring out her taxes.
Schneider could owe more than $630,000 in state and federal levies for her Jeopardy run alone, according to Scott Haislet, a California CPA and tax attorney. Given she will get a million-dollar paycheck, the Internal Revenue Service could collect up to 37% of her “Jeopardy” earnings over $523,600. And her home state of California could take 12.3% of the cash reward over $625,369, Haislet says.
California collects an additional 1% to go towards mental health services on incomes of more than $1 million in a single year.
The estimate doesn’t include the taxes Schneider owes working as an engineering manager—her full-time job—or any other statutory deductions. However, her regular earnings are likely be lower, as the “Jeopardy” champion took a demotion, exhausted all of her paid time off, and took unpaid days off to continue participating in the show, according to the New York Times.
Given Schneider’s winning-streak spanned 2021 and 2022, there is another potential issue. It’s uncertain whether her winnings will be taxed across two years or just one.
Gameshow winners that take home a cash prize exceeding $600 are often given a 1099-MISC tax form from the television network or production company, Haislet said, noting that participants are often required to sign an agreement that “holds the production company harmless for any tax consequences to the recipient of such payment.”
While the filing itself may be complicated, receiving her winnings at the beginning of the year is actually beneficial for Schneider, giving her the flexibility to possibly reduce what she pays out, said Cindy Levine Ostrager, a partner at CohnReznick LLP with a CPA and CFP.
“It’s important to have good tax planning so she could reduce her tax hits,” Ostrager said.
On Wednesday’s episode of the popular program, Schneider lost to Chicago native Rhone Talsma in the “Final Jeopardy” round. However, she still came out a victor by earning a spot in the syndicated show’s hall of fame with the second-longest winning streak in “Jeopardy” history. Schneider eclipsed Matt Amodio’s record of 38 games earlier in the week, but still follows Ken Jennings’ record of 74 consecutive wins in 2004.
—With assistance from Ben Steverman.
This article was provided by Bloomberg News.
