It takes tremendous luck -- and a lot of trivia knowledge -- to walk away from a game show with a notable prize. It also won't take long for the Internal Revenue Service to demand its share. Your winnings represent income, even if you just win a coffee pot.
Parting Gifts and a Tax Form
Game show producers reward winners in cash, tangible goodies or both. Some give "parting gifts," which can be anything from a carton of gourmet coffee to a laptop. Tangible items have value, and you'll get a 1099-MISC form reporting that value to the IRS if the total is $600 or more. You have to claim the amount of the gift or winnings anyway, even if it doesn't come out to $600 and you don't get a 1099. The value might be based on fair market value or the manufacturer's suggested retail price, and both can be higher than what you would actually pay if you bought it from a store. It can add insult to injury if you neither like nor want the gift, but you can always decline the offer.
Even a Little Bit Can Hurt
As of publication, the difference between earning $89,350 and $89,351 a year increases your tax bracket from 25 to 28 percent. A $950 computer win will push you over the edge. If you were to win $100,000, you'd jump into a 33 percent tax bracket. All cash winnings go on the 1099-MISC.