You've seen the game shows where contestants hop around the stage excited beyond belief at the possibility of winning cash and prizes. Most notably, among shows that give away merchandise is The Price Is Right (TPIR). Contestants who win the big prize, known as the Showcase Showdown, can scoop up tens of thousands of dollars in trips, appliances, sports and recreation equipment, cars, etc. What you don't see, according to some of the winners, is when the other shoe drops. That is, the tax shoe – and it drops fast.
Win the prize, pay the tax piper
Most of us know if we win a cash prize, there are taxes to pay. Big prizes mean big taxes. But many game show contestants don't realize when they win merchandise, there's also tax to pay, and you might not get out the door with your prize until some of that tax is paid.
When the prize is merchandise or travel – a washer/dryer, a new car, a cruise – it's a different ball game. Just ask Andrea Schwartz, who is warning unsuspecting game show contestants.
Last year, Schwartz was thrilled to win $33,000 in prizes on TPIR. The list of goodies included a pool table, a shuffleboard table, and a red Mazda2. After the show, she was whisked backstage for a dose of reality – the tax issues.
TPIR is filmed in California. Schwartz found out the hard way that when you win prizes in the Golden State, you don't get to wait until you file your tax return to pay the taxes. If you want the prize, you pay right then and there, said Schwartz.