10 Things Game Shows Won’t Tell You

Jan 16 2011

10 Things Game Shows Won’t Tell You

1. Could you be less boring?

Prior to his audition for “Million Dollar Money Drop,” Joel Sturdivant thought he and his friend had a pretty compelling story – high school sweethearts, now best friends. Then he heard one of the other would-be contestants was a lion tamer, another pair had spent the last year as missionaries in a developing country. “I knew we were screwed,” he says.

To a game show’s producers, fitting a type or having a unique background is as important as playing the game well, says computer programmer Warren Usui, who has been a contestant on “Jeopardy!,” “Merv Griffin’s Crosswords” and “20Q.” They want interesting people who will keep viewers watching. For those who aren’t missionaries or circus folk, Usui suggests weaving interesting tidbits into the answers to the shows’ producers’ personal questions. “I once lost a boa constrictor in my car,” Usui recalls telling producers, who later asked him to share the details on-air with Alex Trebek during what ended up as a four-game stint on Jeopardy. (For the curious, the 6-foot-long red-tailed boa slithered behind the back seat when his owner and Usui left him unattended during a restaurant stop; despite attempts to remove him, the snake then lingered there for a month.)

2. You’ll pay taxes on those winnings. Lots of taxes.

If you win, you’ll owe federal and state income taxes on your total winnings – and maybe more, says Melissa Labant, a tax manager at the American Institute of Certified Public Accountants. A big enough windfall could push you into a higher tax bracket. A married couple making $130,000 who win $10,000 would see their federal rate increase 3%, which would raise their overall tax bill by $6,700 — more than half the prize.

Then there’s the state tax bill. Winners must file a return where they won (usually California or New York), then claim the taxes paid as a credit in their home state, Labant says. If your home state has a lower tax rate, you won’t get back the difference. For example, an Ohio resident who won $5,000 might pay as much as $528, or 10.55%, to California, but claim a credit for only $150, the 3% his own state would have taxed him on that income. That second state return also adds to fees for tax prep and e-filing — TurboTax.com, for example charges $36.95 per state in most of its online filing options to prepare and file a return online. Net loss: $414.95.

3. Winning could ruin you.

Like lottery winners, game show contestants who come home with a cash or prize windfall can end up worse off than before, says Susan Bradley, a certified financial planner and the founder of the Sudden Money Institute. Problems start with a winner’s pie-in-the-sky idea that the $100,000 he won is really exactly that amount in his pocket (taxes: see above).

The next domino: spending more than he can afford on a big ticket purchase such as a vehicle, home or home renovation. “You’re mentally spending $100,000, but you don’t have $100,000,” says Bradley. “You have maybe $70,000.” What’s more, winners don’t always ask the important questions on a big purchase—even if their winnings can cover it. “Can you afford the taxes, the insurance, the upkeep,” asks Bradley. Smart winners limit “celebration” spending to 10% of the winnings, she says, and make a plan about how best to use the total amount.

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