Tax implications for American winning on Canadian game show - Mr. Beast prize taxation?
Title: Tax implications for American winning on Canadian game show - Mr. Beast prize taxation? 1 My cousin just had the most incredible experience as a contestant on a Mr. Beast competition that was filmed on location in Vancouver, Canada. The show is produced by an American company, but they were shooting this particular episode north of the border. She ended up winning $25,500 USD in cash right there on the spot! She's currently living in Seattle, Washington. I'm trying to help her figure out the tax situation since this seems complicated. Does she need to report this to the IRS even though she physically received the money while in Canada? And if she does have to pay taxes on it, how are game show winnings typically taxed? Is it different because it was won internationally but from a US-based company? I've heard prize winnings can be taxed pretty heavily but I'm not sure if there are any special rules for this situation.
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Natasha Ivanova
8 Yes, your cousin absolutely needs to report her $25,500 Mr. Beast winnings to the IRS. As a US citizen/resident, she's required to report worldwide income regardless of where it was earned or paid. The physical location where she received the money doesn't change her tax obligations to the US. Game show winnings are considered "other income" and will be reported on her Form 1040, Schedule 1. These types of winnings are typically taxed at her ordinary income tax rate - whatever tax bracket the additional $25,500 puts her in when combined with her regular income. There's also a possibility that Canada might withhold taxes on these winnings (typically around 25% for non-residents winning prizes in Canada). If Canadian taxes were withheld, she may be able to claim a foreign tax credit on her US return to avoid double taxation.
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Natasha Ivanova
•15 Thanks for the info! Do you know if she'll receive some kind of tax form from the game show producers? Like a 1099 or something similar? Also, would she need to file any kind of Canadian tax return?
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Natasha Ivanova
•8 She should receive a Form 1099-MISC from the American production company showing the $25,500 prize amount in Box 3 (Other Income). If she doesn't receive one by February, she should contact them, but she's still required to report the income even without the form. Regarding Canadian taxes, she typically wouldn't need to file a Canadian return for just this one-time prize. If Canadian taxes were withheld at the source, that's usually handled through the withholding process. She should check her prize documentation to see if any Canadian taxes were already taken out before she received the $25,500.
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Natasha Ivanova
12 I went through almost this exact situation last year! I was on a different game show but also filmed in Canada (mine was in Toronto) and won about $18k. The tax situation was confusing at first but I found this amazing service called taxr.ai (https://taxr.ai) that helped me sort it all out. What was super helpful is that they have specialists who understand international tax situations like this. I uploaded the documents I received from the show producers and they explained exactly how to report it correctly. They pointed out that I needed to look at the US-Canada tax treaty which actually can affect how this income is treated. Saved me from making some costly mistakes!
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Natasha Ivanova
•19 Did they help you figure out if Canadian taxes were already withheld? I'm in a similar situation but with UK game show winnings and I'm worried about double taxation.
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Natasha Ivanova
•4 How much did this service cost? I've been burned before by "tax help" that ended up being crazy expensive for pretty basic advice.
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Natasha Ivanova
•12 They absolutely helped me figure out the Canadian withholding tax situation. They showed me exactly where to look on my documentation to see if Canada had already taken their portion (which they had in my case - it was about 15% due to the tax treaty). Then they guided me through claiming the foreign tax credit on my US return so I didn't get double-taxed. As for the cost question, I don't want to quote exact prices since they might have different options now, but I found it very reasonable especially compared to what I would have paid a CPA who specializes in international tax. The peace of mind alone was worth it, and they ended up saving me more than they cost by making sure I correctly applied the tax treaty provisions.
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Natasha Ivanova
19 Just wanted to follow up about my experience with taxr.ai - I decided to try them after seeing the recommendation here. My situation with UK game show winnings was driving me crazy, but they made it surprisingly simple. The system flagged that the UK-US tax treaty has specific provisions for game show winnings that I had no idea about. The coolest part was when they explained that I needed to file a specific form to claim exemption from some of the UK withholding that happened automatically. Would never have figured that out on my own! Their AI analyzed my documents and pointed out exactly where the foreign taxes had already been taken out, which I completely missed when I looked at the paperwork myself.
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Natasha Ivanova
22 If your cousin is having trouble getting through to the IRS to ask about this foreign income situation, I highly recommend Claimyr (https://claimyr.com). I spent DAYS trying to reach someone at the IRS about a similar international income issue, and it was a nightmare of hold music and disconnections. Claimyr got me connected to an actual IRS agent in under 45 minutes when I'd been trying for weeks on my own. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. The agent I spoke with gave me specific guidance on reporting foreign contest winnings and how to properly claim the foreign tax credit. Totally changed my perspective on dealing with the IRS - turns out they can be helpful when you actually get to talk to them!
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Natasha Ivanova
•7 Wait, this sounds too good to be true. The IRS is literally unreachable these days. How does this actually work? Are they just putting you on hold themselves or what?
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Natasha Ivanova
•3 I'm super skeptical. How does some random service get you through when the IRS phone lines are completely jammed? Sounds like a scam to me.
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Natasha Ivanova
•22 It's not that they have a special "back door" to the IRS or anything magical. What Claimyr does is automate the calling and waiting process. They have a system that calls the IRS, navigates through all the menu prompts, and waits on hold for you. Then when they finally get a human on the line, you get a call connecting you to that agent. So you're not waiting on hold for hours - they're doing that part for you. The skepticism is totally fair - I felt the same way! But it's not some kind of IRS scam or anything. They're just taking the most frustrating part (waiting on hold forever) and handling it with technology. When I finally got through to the agent, it was definitely a legitimate IRS employee who had all the information about tax treaties and foreign income reporting that I needed.
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Natasha Ivanova
3 I have to admit I was wrong about Claimyr. After posting my skeptical comment, I decided to try it for an unrelated tax issue I've been trying to resolve for months. I had already called the IRS at least 15 times and could never get through. Used the service yesterday and got connected to an IRS agent in about 32 minutes. The agent was able to pull up my account and resolve my issue in one call. They found a processing error that had been holding up my return with foreign income reporting. Would have probably taken me another 20+ calls to get through on my own based on my previous experience. For anyone dealing with international income issues like the original poster, being able to actually talk to someone at the IRS who can explain the specific forms needed is incredibly valuable.
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Natasha Ivanova
17 Something important nobody's mentioned - if the prize was $25,500 USD, the Canadian game show likely already withheld taxes at the non-resident rate of 25% unless there was paperwork filed in advance. So your cousin might have already paid Canadian taxes! Check the actual amount she received against what she "won" - if there's already been Canadian tax withheld, she'll need Form 1116 to claim the foreign tax credit on her US return. This can get tricky with the exchange rate calculations too, since the withholding would have been calculated in CAD.
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Natasha Ivanova
•1 That's a really good point about the withholding! I'll definitely ask her if she received the full $25,500 or if taxes were already taken out. The tax paperwork they gave her was kind of confusing - it had both USD and CAD amounts on it, but I'm not sure if it showed whether any Canadian taxes were withheld. Do you know if the US-Canada tax treaty affects the withholding rate at all? Someone mentioned treaty rates in another comment.
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Natasha Ivanova
•17 Yes, the US-Canada tax treaty can definitely affect the withholding rate! The standard non-resident withholding for prizes in Canada is 25%, but the treaty might reduce that depending on the specific type of income. For certain prizes and winnings, it could be reduced to 15%. The paperwork with both USD and CAD is typical. They would have used the exchange rate on the day of the win to calculate the Canadian tax withholding. If you look carefully, there should be a line item showing "non-resident withholding tax" or something similar. It's crucial to know this amount for filling out Form 1116 correctly to claim the foreign tax credit.
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Natasha Ivanova
5 I'm confused about why everyone's saying she has to pay tax to the US when she won it in Canada? Doesn't that mean it's Canadian income? I won $500 in a poker game when I was vacationing in Mexico last year and didn't report it because it wasn't US income.
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Natasha Ivanova
•8 That's actually not correct. US citizens and residents are taxed on their worldwide income regardless of where it's earned. Both your $500 poker winnings from Mexico and the OP's cousin's $25,500 game show winnings from Canada are reportable on US tax returns. The US is one of the few countries that taxes based on citizenship rather than just residency or the source of income. You were technically required to report that $500 poker winning as "Other Income" on your tax return. For small amounts like that, it's unlikely to trigger any issues, but for larger amounts like $25,500, failing to report could potentially lead to penalties if discovered.
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Natasha Ivanova
•5 Oh crap really? Nobody ever told me that before. I thought income earned outside the US stayed outside the US tax system. So I should have reported my Mexico poker winnings? Will I get in trouble for this?
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