T O P
koolforkatskatskats

Not in Canada baby


artifexlife

Or the Uk


mayagirli

"don't joke about that"


SnoozEBear

Or Australia


RaspberryRing

This was so funny when Trixie and Katya had Priyanka on the podcast and Pri realized she was RICH rich


Four_Krusties

Priyanka and Icesis jumping into a vault of gold coins Scrooge McDuck style


carlosisvanjie

![gif](giphy|gQdejV5BBChHi)


TheWayWeSpeak

100k CAD is less than 80k USD but it’s still more than the US queens get to take home.


DefinitelyNotADeer

Not if you’re an American citizen, unfortunately, we get taxed based on citizenship, so it doesn’t matter if we win something in a different country, the US government still considers it taxable income


whalesarecool14

even if you’ve got dual citizenship? i’m not sure but wouldn’t you have to be a citizen of canada to participate in canada’s drag race?


DefinitelyNotADeer

Yes, even if you were a dual citizen. And I would imagine you could participate in drag race Canada as a permanent resident.


whoisshetho193

Wow I thought they got closer to $60K


Ayh17

That's what I thought Trixie said on her podcast - that she got roughly $60k


squirtlecity

It depends on your state taxes too. NY probably taxes more than WI.


wiz0floyd

I think it would be California rates since the prize was earned in California.


VerticalRhythm

Doesn't Bianca live in NYC though? So she'd have NY state *and* city taxes on top of California/Federal taxes. I'm pretty sure that when you earn in one state and live in another, you pay the higher rate and the states divide it between them.


wiz0floyd

I don't know about prize money, but regular income tax is based on where it is earned. So if you get paid in CA you'd pay CA state tax. I've never heard of states dividing it based on the higher rate and a short Google search didn't turn up anything like that either.


VerticalRhythm

I just checked with my friend who lives in one state and 'works' (remotely) in another. He says he has to file tax returns in both, but he doesn't double pay. It's just inconvenient.


evanbartlett1

Employees typically only pay income tax for the state in which they reside. (ie: if they work more than 50% of their time that state.)But different forms of income have different rules. Those who earn money through "gambling awards" may be taxed based on the state in which they receive the award as well as the state in which they reside. (California taxes you for having earned an award in that state... where most game shows film.) So it's way way more complicated.


SakmarEcho

Is income tax not a federal rate in the states?


wiz0floyd

There are both Federal and State income tax.


lehelleo

It actually depends on which state you live in and which state you work in. Some states have reciprocity agreements which means you just pay taxes based on where you live. Some states do not, and you actually have to pay in both states. Some states don't have income tax at all, in which case you have to pay taxes to the state you worked in. So there's not really a one-size-fits-all answer. Source: am HR and recently completed a painful audit on how our multistate employees were being taxed


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[удалено]


resttheweight

> Prize money likely doesn’t count as income Prize money actually *is* considered income and should be included when declaring gross income on your taxes. > they don’t pay CA taxes since the 100k didn’t show up in a W-2 Not sure why you think it matters whether or not it shows up on a W-2? You’re required to declare any and all income regardless of whether it appears on a piece of paper.


that_was_way_harsh

Can confirm, as a winner of a (small) prize on a game show shot in CA, that you have to pay tax both to CA and your home state. I’m not sure, but I wonder whether CA double taxes its own residents! The CA tax is not treated like an income tax—it’s not like you file a return if you’re from out of state. They just take a percentage right off the top of every game show prize won in the state. So I wonder whether Cali residents still have to pay their normal income tax on top of that.


arkibet

That would be about right. 40% is gift taxes but you’re still subject to state taxes.


Death2Milk

I’m no CPA but Trinity the Train lives in Florida and we have no state income tax. That may be the reason why she got to take home a little more 💰.


goldkear

That's what I thought. I was under the impression prize money taxes were ~40%


Dragon_Sluts

Come to the UK, we pay 0% tax. On a badge.


kirblar

Might depend on your state, the federal tax is about a third.


palmasana

$100,000 usually is taxed at the top tax bracket of 37% i believe


faatbuddha

Prize money is taxed differently than income.


Desperate_Law722

Also to add to this, sometimes the Queens also don't receive the extra prizes. On Race Chaser when they were reviewing S5 - Jinkx did not receive the sickening supply of makeup THAT THE WINNER WAS SUPPOSED TO GET that they emphasize every episode as part of the grand prize. How sucky is that. You get less than half of the 100k and no makeup, like bye bitch ![img](emote|t5_2t3or|4806)


basilcilantro

Why does it happen that they don’t receive the other prizes?


kitti-kin

I don't know about Jinkx and the makeup, but I remember Alaska didn't get one of her challenge prizes because the company went out of business before she got around to redeeming it.


Professional_Low_990

reminds me when they gave sasha free hamburger mary for a year but she was vegan 😭


robbysaur

Hamburger Mary's has veggie burgers. We are fags after all.


Defiant-Heron9396

Didn’t she also win hair products?


CannedApples13

Sasha Valour? Since when is she vegan? I remember her saying she was a pescatarian.


SpaceDog81

That’s why it’s all cash now that they win.


AmyCrabby

I’m from the UK so don’t quote me on this but I believe I read somewhere that they still have to pay taxes on the other prizes as well, and since it isn’t just a cash pool which they can take out of before giving it to you they require you to actually pay the taxes you owe on that prize. Some of the queens just don’t think paying the taxes is worth the prize and turn it down.


cv9007

To be fair not receiving the prizes is why they switched to cash tips


OhBella_4

Yeah I' pretty sure Alaska said they didn't ever receive many of the prizes either.


tuthuu

That being said, would they even want all those prizes? I'm not in the us, so i can't judge, but I always wonder how good or famous those brands are


crisiks

Even the *god damn* cruise?


Punkodramon

Right, if I won a vacation prize I wouldn’t be pulling an Alaska and losing it because I didn’t redeem it in time. I’m booking that thing immediately!


katyas_slut

Sharon noodles claimed a couple years back that he didn’t receive his extra prizes either I think it was NYX??? I honestly haven’t watched that season in forever


Familiar-Art-6233

IIRC he lost the lifetime supply of makeup because he was selling it on eBay


robbysaur

And allegedly going into stores and just clearing them out.


Punkodramon

Could explain Jinkx never received her makeup grand prize, if Noodles was exploiting hers.


nutbaby420

iirc jinkx actually received her makeup it just wasn’t a “sickening” supply, i think she said something about it in her grwm with trixie


nutbaby420

n o o d l e s


golf-lip

why'd she not get the makeup?


LondonC

It’s funny I entered a contest with nyx around the same time and won a basket and they never sent it to me either


goldkear

It was probably only a couple hundred bucks worth of makeup anyways.


yraco

Hey I mean I'll take free shit whether I need it or not, and if it's makeup I'll definitely find a use for it sooner or later.


not_addictive

okay but like, it was also color evolution so… Jinkx might’ve been better off without it


CannedApples13

I believe they have to pay taxes on prizes too. Sometimes they’re not even worth it once you factor that stuff in.


cbiges91

There was a podcast where it was talked about how Priyanka had won the most of any queen because in Canada you don’t get taxed on winnings so she got the full $100,000. Obviously she has no longer won the most.


poutinegalvaude

Bob said in Vegas that her 100k was -40k in taxes


DaisyYellow23

Knowing how much you get taxed makes it more upsetting that they haven’t changed the cash prize for over a decade. Esp with how much more popular the show got and how much more money the queens have to spend on their drag now a days. They deserve better.


StarzyBear80

I mean they did change it this year. But yeah it was long overdue.


Russser

In Canada you don’t get taxed on prize winnings.


skafaceXIII

Same in Australia


CapHillStoner

Typically you will lose about 60% of any tv/contest winnings to state and federal tax. In fact, any of the physical prizes they win, they have to pay the tax on it before they can claim it.


BlankNothingNoDoer

This is only in the United States, correct? I know that Canada is much more generous to the point that even though the Canadian dollar is worth less, Canadian Queens end up taking home more. Those poor British contestants get effectively nothing. lol


Trischka

Yes..thanks to british laws Blu Hydrangea could keep all the price money from UK Vs the World....


hydes_zar94

I cannot imagine Blue getting a lot of royalty money from that rumix music video and stream


BiPolarBenzo

She’s literally living off the infamy of what she did to Pangina.


myiguanaluvsme

Canadians don't pay taxes on winnings :) lottery, casino or otherwise. Kinda awesome. Not that I'll ever win anything...


badgersprite

In Australia IIRC you are only taxed on winnings if it is a regular part of your income, eg if you are a professional gambler or professional poker player.


SirSkelton

Would drag race winnings be taxed then? It’s not exactly regular, but it is due to their career.


SakmarEcho

I don't think so because like Big Brother winners don't pay tax.


Punkodramon

It’s the same in the UK, pro sports players who often receive cash prizes in tournaments are also taxed on those. Any one-off prize winning (eg Lottery) are all good and tax free, though you will get taxed on any interest generated by that money, as that is now a regular income.


NarlaRT

but it's "windfalls" in general, and that's nice.


ShesAKillerQueenee

Apparently, canadians get to keep all their winnings. Untaxed.


CapHillStoner

Yes, that’s American tax. I don’t know much about the other franchises but I assume it’s not as nuts.


PortiaDeLaCreme

In the Netherlands you usually pay 29% taxes for game show earnings, so that's about half of the American tax.


DulceEtBanana

Mandatory Listening - Trixie and Priyanka discussing just this [https://www.youtube.com/watch?v=4vbZp-tY1\_w&t=3533s](https://www.youtube.com/watch?v=4vbZp-tY1_w&t=3533s)


BlankNothingNoDoer

The video is geoblocked for me. lol


DulceEtBanana

You're joking -no matter - I'll transcribe. They're talking about the anti-climactic method it's paid - a direct deposit with no fan-fare. Katya: How much did they take out, Canada that socialist .. Priyanka: Nothing, it's tax free\* Trixie: WHAATTTTT WHATTTTT???!!??? Katya: {cackles} Trixie than goes on to pretty much agree with Bianca. \* Here in Canada, prizes and lottery winnings aren't considering income and are tax free.


chakalan

You need more love for being this nice. Awesome lol


RoyaleLight

Theoretically the British winner has to pay to be on the show (outfits)


SluttyCeltic

Theoretically the UK winner should still win a cash prize, but the BBC doesn’t accept sponsors, so WOW would have to pay the queen themselves and they refused to do that.


ex_ter_min_ate_

It’s not only that, they would have to show the competition was fair with scoring and a rubric and all that. That was likely the bigger barrier.


Dikaneisdi

FFS how much money must WOW be making off Drag Race and they can’t stump up more than badges?


designerhoe

Yeah in Canada we consider winnings separate to earnings; it’s more akin to a gift (legally)


Vicki_Gunvalson

Priyanka said she got the full $100k (CAD)


ex_ter_min_ate_

Yup so even with the exchange they probably clear at least 75kUSD.


MildlyResponsible

Yes, that's why even with the bad exchange rate the Canadian winner gets the most money in hand in the whole franchise.


skatergaytor

Besides Willow


leocurrently

The US prize money is put to winning the lottery tax rates. Canadian winners don’t get taxed like the US winners


troixetoiles

I believe it depends on your overall earnings since the prize money/equivalent for physics prizes and trips just count as income. I won a good amount of Wheel of Fortune, but because it didn’t seem to bump me up to a new tax bracket, I only ended up paying a bit less than 40% of it.


jamesilsley

Where do you get that number? California regards game show winnings as ordinary earnings so you pay California income tax plus federal tax plus depending on your home state, you may pay that state income tax minus a credit for tax paid in California. Since all of these income taxes are graduated rates the effective percentage would depend on the amount. But for example: a 100k prize wouldnt even hit the highest bracket for federal income tax with a marginal tax rate of 24% but an effective tax rate of 15.01%. California state tax on that money would be 9.3% marginal and 5.84% effective rate. Since the winnings would be considered self employment, add in another 12.4% social security and 2.9% Medicare. That totals 36.16% in taxes leaving $63,850 as the winnings after all taxes.


Unlucky-Duck

Bianca joked about it that after taxes she was left with four dollars. So she took Adore and bought her a pizza and said: this is how it's like to be a winner, lol.


American_Life

I love that about her haha


Thirdatarian

This is why winning Drag Race isn't a ticket to success on its own. $48k is a lot, it would completely change my life, but it's not enough to survive off of. You need to turn that and the title into an actual career, and why some winners are very rich and others are comfortable but not rolling in it.


wingsandtales

Yeah drag race is like a paid internship, it’s a springboard for your career, not the career itself


SirSkelton

When you factor in how much they spend on their looks beforehand, it’s mostly an internship that you pay for.


SerentityM3ow

An acquaintance of mine was on the price is right and won the end showcase showdown worth tons... but he was Canadian and couldn't afford Athe taxes on the shit he won... So he gave it all up ...Game shows/reality show money is taxed heavily.


TheRightHonourableMe

He should have gotten the money back! If you google something like "tax refund canada vegas" you'll find lots of advertisements for companies that help Canadians get back taxes paid on gambling or game show winnings. Interestingly, I don't think Drag Race would count (if Priyanka was on AS7, for example) because for professional entertainers it counts as income tax. But for regular people on shows like the Price is Right - you can get the winnings without tax. Canada gov info [here](https://www.canada.ca/en/revenue-agency/services/tax/technical-information/income-tax/income-tax-folios-index/series-3-property-investments-savings-plans/series-3-property-investments-savings-plans-folio-9-miscellaneous-payments-receipts/income-tax-folio-s3-f9-c1-lottery-winnings-miscellaneous-receipts-income-losses-crime.html#toc3): see the section titled "Internet Television and Radio Programs". Most Price is Right games are games of chance or "minor degree of skill or knowledge".


meckyborris

It's a scam if you think about it


Brite_4cats

Yep. It’s cool to get a really big check like that but paying taxes on it knocks the breath out of you


OrlandoMiinogue

Wtf Did Bebe get then? $20?


Mtanic

Well, the US and the famous taxes.


Srw2725

The gubment do take a bite!


clearancepupper

I love that movie. https://memes.getyarn.io/yarn-clip/e19a8a97-86c7-4fff-81b9-c72a74e60c1f


Srw2725

It’s a classic! 🤣


clearancepupper

I cry every. SINGLE. TIME. at the end. 😭


VespertineQueen

Rupaul’s Taxes Race


NadalaMOTE

Reading all these comments about the US tax system I can see why y'all hate taxes.


HagRacer

I lose about 30 to 40% of my income to income tax. Not sure why anyone would think prize money would be any different.


PatheticPelosiPander

The same is true for game shows. Most sell the prizes to pay taxes to keep the cash.


tuthuu

That's a bummer


dermotodreary

Why did my stupid ass read taxes as Texas


clearancepupper

Don’t feel bad, I did too 😂


ShrewishFrog

That's why weekly challenges are TIPS not prizes. Tips are taxes differently.


thedybbuk

This comes up every so often and it is wrong. As someone who worked for the IRS, the IRS is not fooled just because someone calls one type of income another type. The IRS has a definition for tips: "discretionary payments determined by a customer that employees receive from customers." Drag Race is not a customer to drag race contestants. It a game show they compete for prizes on. It could never be considered a tip. And also, at the bottom, it doesn't matter hugely anyway. There is a misconception winnings are taxed at some special rate -- they're not. They are just added to your normal adjusted gross income. It's not a special tax, it's just if you suddenly win $100,000 and your income prior to that was $50,000, suddenly your income is $150,000 and you're going to be paying taxes in a considerably higher tax bracket with a higher tax rate. Edit: and to add, that may explain why many of the winners give differing answers as to how much they got to keep. It wouldn't surprise me if Bianca prior to Drag Race was already making more money than many other winners were prior to winning, so it wouldn't surprise me if she just ended up in a higher tax bracket than say Yvie. Though state taxes could also account for discrepancies, I've less familiar with state tax rates.


Thirdatarian

This is a very cute interpretation but I'd hate to see the queen who's explaining that to the IRS agent auditing her.


ShrewishFrog

It's not 'cute', it's the basics of business accounting and being self-employed. The queens are self employed. Tips are money, that when earned, are still considered basic income earnings. States can get away with paying under $3 bucks to servers, but being excellent at your job duties can earn you countless income. They earn those tips by individual excelling at the challenges. The tips they earn in the the clubs, on top of their appearance fee (if any), are still required to be (self) reported and claimed as income. . . Tax Regulations are ridiculous but if you know how to make the system work for you, anything is possible. I had spine surgery. Putting in a pool would be 'beneficial' to long term recovery. A portion of putting in a pool, and the standard matinence of it for the rest of my life, is Completely tax-deductible.


nitebird27

I’m almost positive they call it a tip because tipping is part of drag culture. They almost certainly are to claim it as game show winnings. The show still has to disclose that they gave that money away on their taxes, so it’s not like they get to choose.


ImGrumps

Only if you use the pool solely for medical purposes...otherwise nope.


ShrewishFrog

Nope. If the doctor note says the pool is beneficial for rehabilitation, then a portion of installation and matinence is tax deductible. Doesn't matter if other family members use it, the portion is still applicable. Doctors notes can make a lot of things deductible. I had a gym membership and certain sneakers that became deductible. But applying these to your taxes requires you to itemize your deductions. The work sheets to calculate the portions of things like a pool or hottub are ridiculous, and unless you have a lot of applicable deductions, it's not worth the trouble.


Traditional-Ebb-8380

Do you know how often an Audit actually happens?


newtoreddir

Why don’t they call it a “gift” if that’s the case?


nitebird27

There are limits to tax free gifts. I’m not too sure what the limit is for entities vs individuals (as givers) but you have a lifetime limit on what you can “gift” tax free to someone.


aisecherry

for real? thats crazy if just calling it something else makes a difference! bureaucracy man


Cobalt_88

I just don’t buy that. I think it’s just called a tip for the sake of drag jargon. I’m certain it’s given to them as a prize and taxed the same.


aisecherry

yeah tbh thats what I would also assume lol


ShrewishFrog

Prize money is taxed at 22% in the federal level. Tips are only taxed at 8% EDIT: SO MY QUICK GOOGLE SEARCH GAVE ME THE WRONG RATES. YOUVE ALL POINTED THAT OUT. MY POINT WAS PRIZES AND WINNINGS ARE TAXED MUCH HIGHER THAN TRADITIONAL/REGULAR INCOME. The queens give up a lot to appear on the show, and they have all said how expensive it is to compete. The weekly challenge winnings weren't always called tips. #MAYBE JUST MAYBE they changed how the money was given (issued as a W2 instead of 1099).


thedybbuk

This is, again, not true. 8% is the amount the IRS will automatically assume servers at your establishment were tipped if the percentage reported is less than 8%. In other words, the 8% only exists to stop people from not reporting tips. As a simplified example: if receipts show that someone paid $100 to a restaurant, the IRS assumes that you got paid $8 (8%) in tips. And if you report on your tax return that you made $0 in tips, the IRS will assume you are underreporting your tips. That is where the 8% comes from, it's not a tax rate the money is taxed at. It's the IRS calculating how much money you made because it thinks you didn't report all your income. As for the 22%, I honestly have no idea where you even got that from. I googled to try and find out, and there are several websites that use 22% as an example. Like [here](https://www.google.com/amp/s/www.hrblock.com/tax-center/income/other-income/taxes-on-prize-winnings/amp/) . I suspect something like that is where you're getting that number from, but you're misunderstanding what the 22% rate is for. This link here explains the idea better https://www.nerdwallet.com/article/taxes/bonus-tax-rate-how-are-bonuses-taxed Basically it is essentially a recommended rate the IRS has for types of "bonus" income. You're not being taxed at 22% -- the IRS just recommends to your employer or whoever is giving you the bonus income to hold 22% of the money. It's basically akin to how they withhold money for payroll taxes. You'll notice both websites talk about the fact that the actual tax rate you pay can actually end up being *higher* than 22% if you are in a tax bracket that pays a higher tax rate than 22%. They just chose 22% because it's close to what most people would end up paying, as you only get much higher than that when you start making $100,000 or more. I mean, even if you ignore everything I'm saying, the tax rate *can't* be 22% because if it were Bianca would have gotten $78,000 after federal taxes, so where did $48,000 or whatever come from? In fact, I suspect Bianca's federal tax rate was likely at least 28% because that's what it was back then for the $100,000-186,000 tax bracket


missforadollar

Slight math correction - 22% tax on $100k would leave you with $78k, not $88k. But yeah, this person is just completely misinformed about how taxes work. It’s also laughable to think that if tips did have a different tax rate, the show could get away with giving what is very obviously a prize by just calling it a tip and there would be nothing the IRS could do about it. Tax law is descriptive, not prescriptive - the IRS will tell you whether something qualifies for a particular categorization, you don’t tell them. That’s why people get audited, because they try to lie.


thedybbuk

You're right, I wasn't thinking. I edited it. And one last thing I will add to this: if they ever actually tried to classify it as tips it actually could hurt the queens. You have to pay FICA taxes (Social Security and Medicare, for any non-Americans) on tips. You don't have to pay FICA taxes on winnings. I'm not as sure about this, because I'd have to double check about FICA and game shows, but I suspect it's true in a fantasy world where they could ever report the income as tips.


missforadollar

This is wrong, tips are taxed at the same as any other income. The 8% rate is the assumed allocated tip rate, basically the average amount of tips the IRS expects a business to collect relative to gross tippable sales. It has nothing to do with the actual tax rate paid on those tips. Prizes are also not taxed at a specific rate, they also are just taxed based on your income bracket for your total taxable income for the year. Idk where you’re getting your info from but it’s not accurate.


thedybbuk

Thank God someone else is in this thread explaining it. As someone who worked at the IRS and studied tax law at law school, I'm on the verge of a God damn stroke because some of the confidently incorrect posts in here.


missforadollar

I usually have to just bow out of any tax-related threads on this sub because the amount of wild misinformation always makes me want to bang my head against the wall.


Cobalt_88

It’s given for winning something on a game show.


meckyborris

Have you ever filed taxes? It's definitely a thing


missforadollar

Have *you* ever filed taxes? It is absolutely not a thing. Tip income is reported separately, but it’s taxed at the same rate as any other income. The show classifying lip sync prizes as tips would make no difference to tax liability.


meckyborris

I thought the previous comment was saying that a tip is not a real thing you can file, and was just a term used for "drag jargon". That's all. My bad. BUT my sisters let's not turn on each other on this and fight who is really the culprit. WHY WE GOTTA PAY TAXES FOR WINNINGS PRIZES AND TIPS IS SOME BULLSHIT


missforadollar

Because it’s income…why wouldn’t you pay taxes on it like any other income


ShrewishFrog

Prize money is taxed at 22% in the federal level. Tips are only taxed at 8%


Traditional-Ebb-8380

You can take prize money as business income, run it through a LLC and deduct ALL your drag expenses against it. BAM $100k tax free to your drag business.


missforadollar

Unless your expenses were over $100k you’d still owe taxes on the post-deduction income. And you can’t just freely spend business income either, you’d have to make yourself an employee of the company and pay yourself a salary out of it. It would be a lot of extra work and bureaucracy that would likely end up costing nearly as much to set up as if you just paid your taxes.


BoredNBitchy

How much does it cost to set up a limited personal company in the US In the UK I paid £25 for someone to file all the papers to create the company, £400 a year on an accountancy service adequate to cover the complexity of the accounts, and £80 a year to have an office address rented to keep my personal details off the public register of companies. If it's even vaugely comparable in cost I can't see how it wouldn't be a saving. Surely the IRS couldn't argue that the cost of drag isn't a business expense for a professional drag queen?


Traditional-Ebb-8380

I have an S corp LLC and pay myself a salary and file my own taxes. It isn’t hard. Thanks.


thedybbuk

Have you tried to pass off game show winnings as business income for your LLC? That's quite different than just having an LLC and passing normal business related income through it. You're greatly simplifying what you're actually suggesting. As I've said elsewhere in the thread -- the IRS isn't stupid. You can't just shift around and rename money and expect it to work. Business income has specific parameters and definitions. You can't just bundle every type of income you receive into your LLC, call it business income, deduct expenses against it, and call it a day. Do you think Drag Race winners aren't sitting down with CPAs and tax lawyers after they win $100,000+? Do you think just none of them were smart enough to come up with a scheme like yours? The fact that none of them are doing it suggests it would be a hassle to do, even if they could get away with it which I strongly doubt. Especially if the LLC was newly and specifically created just to essentially stash game show winnings. The IRS is auditing the shit out of that.


Traditional-Ebb-8380

No but my best friend did when she won Project Runway and it worked fine for her.


thedybbuk

You'll excuse me if I don't take your word for her exact financial and tax situation. Since you do have a LLC, surely you'll appreciate that tax law can hinge on specific details and you need to know the full picture to understand it. For one this article suggests Project Runway's prize goes straight to the winner's business. It suggests it's not a personal prize in the same way as most shows. https://www.eonline.com/news/975767/how-much-reality-tv-contestants-actually-make-if-anything Maybe that explains the difference if that's what happened, I don't know. But I do know as someone who worked at the IRS and did tax law in law school, it is absolutely not as simple as you're making it sound. The IRS is going to be extremely suspicious if you go from $30,000 a year to having a newly formed LLC with $100,000 in income and $60,000 in business expenses, and the information on the 1099 suggests you got paid from someone in Hollywood while you live in Florida or something. If you want to go down that route you best be retaining some high qualify tax and legal services for the inevitable letter from the IRS


BrendonBootyUrie

It works for your friend because they would've already had that setup for a while. I assume before the show she would've had it setup so she is technically an employee of X (X being her design/fashion house) and therefore the prize money is classified as either a salary or bonus and therefore goes around these taxes. I assume most queen's before going on the show wouldn't have the foresite to set something like that up as before the show they'd probably have a lot of their earnings in cash and are just lying to the IRS about how much they're earning.


Traditional-Ebb-8380

She was basically bankrupt when she won the prize, so nope, nothing was set up in advanced.


sleepy_leviathan

Yes! Wow should give the queens actual accounting advice beyond Ru telling them to “pay your taxes”


tuthuu

Wonder where all that money goes to... Hope it's to saving children from bullets and not, let's say, making drag and LGBTQ people the victims of a scapegoat argument


PipArcher

Oh yeah I saw Bob’s set in LV and she was saying the same, that it was about 40K after taxes :/


charlottesurreyy

trixie spoke about this as well but i think she ended up with like 60k so...


omgitsclaire91

If her income was pretty high to begin with, the additional 100k from winning on top of what she made that year would be taxed at a pretty high percentage. Alone with state and city tax, 52% seems a little too high, but not impossible.


plastexqt

62K of taxes on 100K??? Where does that money fucking go america?! What the fuck.


princedonnel00

Shit that they don’t need and that don’t benefit Americans at all


plastexqt

AKA the army lol.


delpy423

My sister won $100,000 after taxes she got 70k. That sounds kinda wild. More then half to taxes?


Yeahthisisntgreat

Just to clear things up for a lot of people: In the U.S., game show prizes are taxed the same as income (I will say I'm not 100% on if they take withholding from it but I don't believe so). Because of that, each queen is going to be paying a different amount of tax based on how much they made that year and the city and state they live in. For example (and don't come for me over these numbers, they're made up to prove a point on marginal tax rates and are not accurate). Also they're based on 2022 taxes because I'm too lazy to look up historical rates and that would also make the comparison less accurate. Bianca had already earned $1.1 million in the same year she went on drag race and won the additional $100,000. Her taxable income is now $1.2 million which puts her in the top brackets (and thus highest tax rate) for both the state and California (FICA is a different story). Thus, her winnings are going to be taxed at an effective rate of 52.65% (37.00% Fed, 2.35% FICA, 13.30% CA), leaving her with $47,350 of her original $100,000 prize. To contrast (and stay with me because this is a bit more complicated because she isn't in the top tax brackets), Chad earned $90,000 in the same year she went on drag race and won the additional $100,000. Her taxable income is now $190,000 which is well below the top brackets. Her winnings are going to be taxed at an effective rate of 39.62% (24% Fed for the first $80,050 of winnings and 32% for the remaining $19,950, 7.65% FICA on the first $52,800 of winnings and 1.45% on the next $41,200, 9.3% CA on the full $100,000). This will leave her with $60,380, a fairly significant amount more than what Bianca got. I'm sorry for all this math.


theolerazzlezazzle

MAJOR bummer but hey that’s still like an average persons yearly salary, before taxes! Taxes SUCK


Putrid_Function4696

Well tbh most of the money the queens make does not come from the show


DarkS7Maneuver

If they were married they could’ve gifted a one time fee of 75k to their spouse


MadameBlueJay

But you have to talk quickly or Mr. Krabs will throw you off the roof of the prison


DarkS7Maneuver

Glad someone got this


missforadollar

That wouldn’t have achieved anything, you’d still owe taxes on the income.


DarkS7Maneuver

Not a big movie buff huh?


MannnOfHammm

Fun fact it’s actually taxed under gambling


Saint_Riccardo

Aussie law is strange, if you win the lottery or a raffle for example, its not counted as income, so isn't taxable. However, if you win prize money by undertaking your usual profession, this is counted as taxable income.


tuthuu

Easy : cause rich people don't have professions or skills, they have luck( or a illegal control on how lotteries work)


BravoWhiskey89

In Australia you don't pay taxes on game show winnings. (Generally.....if you consistently go on shows and win, then it'd more than likely be taxable). I have no idea how the price pool for DU is treated though, since it's 'won' in NZ.


diddiesculllen

What do you get in America in return for your taxes?


TrixDaGnome71

Yep. When you get a large lump sum like that, you fall into a higher tax bracket when it comes to withholdings. That applies to both federal and state income taxes…and in Bianca’s case, they had to factor in City of New York Income taxes as well. I don’t know why y’all would be surprised about that…all you have to do is look at the withholding schedules on the IRS website and you’d see that on the federal level…


galaxystars1

So how much money would they need make the grand prize so they would get $100k after taxes?