As thelurkinghorror mentioned, casinos file 1099’s only on high-odds payouts. AFAIK, the guy who placed $777,000 on the pass line at Binion’s Horseshoe Club and walked away, anonymously, $777,000 richer could do this again. (Or rather, would have a 49.3% chance of doing it again. )
I played mostly Twenty-one and such and never had to worry about 1099s. I learned of them when I asked a cashier about the sign “All winnings must be paid in full.”
It seems your link confuses tax rate with withholding. US income tax is progressive by brackets, and gambling is considered normal income, and also your tax bracket != your effective tax rate, so there is no specific answer for the US row.
I assume the concept is the same as withholding tax here - the government will take enough that they are going to break even if you have the highest possible tax rate; then it’s up to you to file a tax return that explains why they should give some of it back (i.e. deductions, lower tax bracket, etc.)
I sometimes read of accounts of winners on Price is Right winning a showcase but not being able to pay for the taxes on the car/RV/boat and are forced to decline it (with some contestants going home completely empty handed since their showcase may have been entirely about the vehicle)
However, this doesn’t make much sense. Couldn’t the winner simply take out a loan to pay the taxes and use the vehicle as collateral, or even better get some cash advances to pay the taxes, then sell the vehicle and pay back the loan so they still have a net benefit of cash?
Brits tend to assume that because Americans have no NHS to pay for, their tax burden will be much lower. The more I read on these Q’s & A’s I see that this is not the case. Mr/Mrs average Brit pays around 30% of their income in taxes, and spouses are taxed separately. Income can be reduced by pension contributions and various other deductions but 28/30% is pretty typical.
On the other hand, I can pocket my lottery win in full, as I can my casino winnings or my horse racing coup. I don’t even have to declare the first £5000 of interest on savings. If I give my daughter, or my mate in the pub, £10,000 there is no tax liability at all.
There is a potential problem with gifts to relatives in the shape of inheritance tax (40% on everything over £325,000, except between spouses). If I give my daughter £10k and don’t survive for seven years, that money is still part of the estate. Her husband’s parents are quite elderly and also fairly well off. To avoid this trap, they give their children £3,000 each year, which is the exempt maximum. I believe that they are currently discussing the situation with a tax lawyer in an effort to reduce their estate even further - unfortunately (?), the house they bought for a few £thousand in the 60s is now worth £million plus.
(My parents unfortunately bought their house for very few thousands in the early 70s, so it’s a long way off seven figures, but still, I pay nearly twice as much in mortgage payments each year as they payed for their whole house!)
Some of the sadder ways game shows cheat contestants is that they will allow sponsors to vastly overstate the value of the “prize”. E.g., a “deluxe” house cleaning package worth $2000. Really only worth a couple hundred bucks. The sponsor knows that no one will really take them up on it since the taxes are too high.
It’s weird since the actual prize is small potatoes compared to the product placement fees.
Wheel dumped their “shopping” round in part due to the tax issues contestants faced.
If only all game shows allowed people to take the cash equivalent.
Oprah is benefiting from a shitload of goodwill, by hosting a show on which it appears she is giving away valuable gifts to her adoring fans. She’s found a legal way to stick her fans with a tax bill, but she’s profiting quite handsomely from her fans.
On the show, she doesn’t say “You get a Buick, so long as you can afford to pay the taxes. Otherwise, you might have to settle for a smaller amount in cash, or maybe even have to decline the Buick altogether.”
She’s creating a situation in which she is taking a big benefit on the backs of her fans by creating a false impression.
Any time Oprah (or anyone else for that matter) wants to give me a brand new car, I will gratefully accept it, pay the taxes, and praise her to anyone who will listen.
I don’t feel every billionaire owes me something. Did I state anything even close to that at all? I don’t think so.
From what I’ve seen and read, Oprah didn’t do shit for her audience. SHE didn’t give them the cars, and she didn’t pay the taxes due on the cars. Why would she get praise then? She doesn’t owe anyone anything, no. But if she makes it look like she is a great human being by giving cars to her audience, but it turns out that was not what it was at all. As someone above said, it’s sleazy. If she had paid the taxes, then at least that would be something in her favor, instead of being praised for doing absolutely nothing.
I believe on most game shows, the prizes are provided by the manufacturer. So Drew Carey or Bob Barker or Monty Hall isn’t personally giving you that car or that living room set. Just the same way as Buick provided the cars that were given away on Oprah’s show. So why do people get so upset at Oprah and not so much at all of the other contests, giveaways and so forth that also give out prizes for which the recipient needs to pay taxes? (Here, for example is a thirteen-year-old thread in which people are similarly pissed off at Oprah for the crime of giving stuff away on her show.)
There is a Carmax 14 miles away from the former Oprah studio. I-290 directly links them. Just drive your new car down there and they will give you the wholesale value of the car. Sure, you could get a little more by trying to sell it yourself. But if you don’t want to hassle, they will take the car off your hands for a fair price.
If you don’t have the money to pay the taxes, just drive your car down there, collect the cash and you’ll still have a whole lot left over after you pay the taxman.
Do Drew Carey, Bob Barker, or Monty Hall make it seem like they are personally giving the prizes to the contestants? Are they in news articles being praised for “Giving their audience a brand new car”?
“In one of the most unforgettable surprises in Oprah Show history, Oprah gave each unsuspecting audience member a brand new Pontiac G6. The ecstatic moment became a pop-culture staple (“You get a car! You get a car!”), and 10 years later, it’s still a thrill to watch”
Wait, so people are freaking out because she supposedly said (I never saw the episode, so I have no idea how this was presented) that she was “giving” the cars to the studio audience? All of this drama and upset over a verb? You know the cashier gives me my groceries, but only after I pay for them.
I would like to think that Oprah deserves some little bit of credit. I don’t think that GM would have sought out the people who came to Oprah’s show and given them cars if not for the fact that Oprah had a show to which these people showed up.
Sleazy? How about pure unadulterated evil? Not only did Oprah Winfrey not offer to pay people’s taxes, she also didn’t offer to pay for their insurance or gas or oil changes.
Here’s the reality. She offered people a free car. If they didn’t want a car or if they didn’t think they could afford the expenses of a car (which includes paying sales tax) then they were free to decline the offer.
I find the quotes you’ve provided utterly lacking in any sort of substantial wording that even remotely suggests that I think “Every billionaire owes me something”
