And you lived in Pennsylvania, what would the tax be on the $200,000?
I live in Northeast Pennsylvania and receive royalities for my books. I believe the $200,000 would be considered the same as a book advance or royalities - you would owe the IRS 35%. But when you win the money your best bet would be to check with an accountant. Hope this helps.
PA's tax rates are pretty low at around 4%. IRS is going to take 28% at the tax rate you'd be in, so you're looking at about $140,000 after taxes, SSI, etc.
I don't think anyone's actually been purchased yet through Amazon yet, so I wouldn't worry about it. The odds are pretty out there for actually getting purchased. There's people who have been on this site since 2010, with Amazon interested in their project, under development, who'll probably never see the $200,000 payday.
At least they might get another $10 grand for the option for the option.
don't count your chickens before they hatch. stop looking at that ferrari, dood!
but here's the kicker...
if they optioned your script it would only be $10,000... before taxes. and probably just enough to pay off your credit card debt. ;)
Or incorporate yourself and save tax...
How about telling the IRS that, since you worked on the screenplay for the, say, last 5 years, you'd like to amend your tax returns for each year back to 2007 and apply the 200,000 in equal parts? It might keep you in a lower tax bracket.....
Couldn't you incorporate then pay it to yourself as a salary?
I'm not that up on US tax law but in the UK I can turn myself into a service company, pay VAT then work out how best to pay my salary.
Ant, I believe in the states its known as a 'loan out' company - Jim