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James Holzhauer had a tremendous run on Jeopardy! and nearly dethroned the all-time champion Ken Jennings. Holzhauer won a ton of that money from the TV game show and now the government wants its cut by levying a boatload of taxes on his winnings.
Professional sports bettor James Holzhauer enjoyed a remarkable 32-game winning streak on Jeopardy! before losing to Emma Boettcher, a 27-year-old librarian from Chicago, Illinois, in his 33rd appearance. Holzhauer did set the all-time record for the most money earned in a single Jeopardy! episode by snatching up $131,127.
During his marvelous run, the 35-year-old Holzhauer earned $2,462,216, including a $2,000 prize for coming in second place in game number 33. Holzhauer was only $58,484 short of the all-time winnings record held by Ken Jennings, who made $2,520,700 in 74 appearances and a total of $3.196 million including tournaments.
The Internal Revenue Service needs to get their piece of the pie and Holzhauer will be taxed up to 37% by the IRS. Holzhauer will also have to pay state taxes on his game show winnings. Holzhauer is a resident of Nevada, but Jeopardy! is filmed in California, so James owes the Golden State a good chunk of change.
What really sucks for Holzhauer is that Nevada does not have any income tax. A double-whammy for Holzhauer is that California has the highest income tax, as much as 13.3% in 2018. The highest rate of 13.3% applies to incomes over $1,000,000, which is applicable to Holzhauer since he made $2,462,216.
Holzhauer, who answered correctly 97% of the time on the show, is expected to pay around 47% in taxes to the government on his winnings. So in the end, the government will take about $1.29 million of his earnings. While James will still make a lot of money, it must hurt watching nearly half of the wealth get taken by the government.
James Holzhauer had better keep playing TV game shows to make up for all of that money he lost to the government. Here is James on another TV game show called The Chase.