The king has reclaimed his crown! James Holzhauer, who won 32 straight "Jeopardy!" games earlier this year before losing to Emma Boettcher, just beat Boettcher and Francois Barcomb to win the 2019 "Jeopardy!" Tournament of Champions. For his latest victory, the quiz-show wiz will pocket $250,000, which brings his total "Jeopardy!" winnings for the year to a whopping $2,712,216. But, of course, Holzhauer won't be able to keep all that money. The IRS and the State of California are going to want a piece of the action, too. Their tax bite was already going to be high, but just by winning the Tournament of Champions, Holzhauer will owe about $125,750 more in federal and state taxes.
Holzhauer's total "Jeopardy!" winnings will put him in the highest federal income tax bracket for 2019, which means he'll pay tax on at least a portion of his winnings at a 37% rate. As a result, he'll likely have to pay around $942,000 of his winnings to the IRS. (Since Holzhauer is married, we used the tax rate schedules for taxpayers filing a joint return.)
Even though Holzhauer lives in Nevada, where they don't have an income tax, he'll also owe California income tax because "Jeopardy!" is taped in the Golden State. California's highest marginal tax rate is 12.3%. However, there's an additional 1% surcharge on all taxable income over $1 million that's imposed to help pay for mental health services in California. For a joint filer, that comes to around $320,000 in California tax.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
When you add it all up, the combined federal and state income tax on Holzhauer's winnings comes to about $1.262 million — or approximately 46.5% of his winnings. That leaves a little over $1.45 million that he'll actually get to keep for himself. To make sure the IRS and California get their cut, the taxes will be withheld from his overall payout.
There's a lesson for the rest of us in this story: Prizes are taxable income (for non-cash prizes, tax is based on the fair market value). So, if you ever win a game show, lottery or even a local raffle, don't go out and blow all your winnings without first putting some of it aside to pay the government.
QUIZ: Can You Answer Jeopardy's Trickiest Investing Questions?
-
The Most Popular Apps for Retirement Planning in 2025A J.D. Power survey ranks retirement planning apps based on customer service and satisfaction. Does your financial app make the cut?
-
Don't Disinherit Your Grandchildren: The Hidden Risks of Retirement Account Beneficiary FormsStandard retirement account beneficiary forms may not be flexible enough to ensure your money passes to family members according to your wishes. Naming a trust as the contingent beneficiary can help avoid these issues. Here's how.
-
The Most Tax-Friendly States for Investing in 2025 (Hint: There Are Two)State Taxes Living in one of these places could lower your 2025 investment taxes — especially if you invest in real estate.
-
Ask the Editor, September 12: Tax Questions on 529 Plan Rollovers to a Roth IRAAsk the Editor In this week's Ask the Editor Q&A, we answer four questions from readers on transferring 529 plan money to a Roth IRA.
-
The Final Countdown for Retirees with Investment IncomeRetirement Tax Don’t assume Social Security withholding is enough. Some retirement income may require a quarterly estimated tax payment by the September 15 deadline.
-
Standard Deduction 2025 Quiz: How Much Do You Really Know?Quiz Test your knowledge of IRS rules that impact how much money you keep in your wallet.
-
IRS in Turmoil: GOP Budget Cuts and Staff Shake-Ups Threaten Taxpayer ServicesIRS Republican lawmakers advance a controversial budget bill that would gut IRS funding further, risking your 2026 tax filing season.
-
Cruise Lines Sue to Block Hawaii’s New Climate Tourism TaxState Tax Your vacation to the Aloha State could come at a higher price tag next year. Here’s why.
-
21 Last-Minute Gifts for Grandparents Day 2025 to Give Right NowHoliday Tips Last-minute gifting is never easy. But here are some ideas to celebrate Grandparents Day.
-
Ask the Editor, September 5: Tax Questions on SALT DeductionAsk the Editor In this week's Ask the Editor Q&A, we answer questions from readers on the OBBB's changes to the SALT deduction.
