And so after the tweet by Simplivity, I went home, changed, and went to bed. I mentioned it to my Caitlin, and she said, and this is a quote, "Ok."
Of course, neither of us knew what it meant to win a super car. I emailed Simplivity the next day, and was told that I had, indeed, won the McLaren, and that I had some paper work to do.
They explained that I won a one year lease of a McLaren 650s (in a beautiful graphite color), and the cost of that least was $50,000. I also had an option for a $20,000 lump sum in leu of the car. Being a car guy, it was a really hard choice.
A hard choice that was made easier when I remembered that I was living in an apartment, with street parking, on a hill, in a heavily trafficked portion of Burlington. And winter was coming.
I chose the cash
I chose the cash. Didn't really have a choice, in the end. The insurance was just too expensive if I took the McLaren, and didn't cover enough miles for me to even drive it to work twice a week.
If you have won a large sum of money before, this won't come as a surprise to you, but I will assume most of you have not. Here is how it is handled:
They give you a 1099MISC, and you add it to your income as though they paid you for a big job. Your income just went from 80k to 100k a year.
So... what does that do to your taxes?
Well, if you are a normal American, playing the witholding game every paycheck, juggling your allowances, and trying to "maximize your tax return," the answer to that question is "winning a supercar breaks your tax witholdings calculations."
If you are like most people, you don't think about your taxes that much. You fill out the allowance forms, hand them in, and hope you don't have to pay in at the end of the year. So what happens when you pay taxes on, say, $50,000 a year, and suddenly make $70,000? You have to pay in!
Probably a lot of money!
Congratulations on your new tax status!