"25% of your action" and the high hand jackpot -- story + poll

[bav]

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It should be pretty easy to figure out the % you owe by looking at a tax schedule w/ the income you brought in last year. Even easier if you filled out a return last year.

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Actually, it's downright impossible to figure out until you actually do you taxes with exact numbers if you itemize and deduct gambling loses. How this added W2G income impacts your final tax burden depends on the size of your income and what other deductions you take.

So the only to-the-penny way would be to wait until next April when you do your taxes. Then fire up TurboTax and do them with the W2G income, then do it again without the W2G income. Then you can compute the difference.

On the other hand, if you don't itemize, the W2G income is stuck there, regardless of your losses. How much of that you will pay in taxes depends on your incremental income tax bracket. Income between $30K and $74K is taxed at 25%. The bracket above is 28%, the bracket below is 15%. You probably fall in one of those three. State and local taxes than go on top. Unless your incoming is sitting on the edge of one of the brackets, you can figure it out pretty accurately now.

Or you could have gone the technically correct route of filling out a form 5754 which is designed for EXACTLY this. You fill in your friend's name and SSN and file it with the Feds. It's basically saying "I won this, but it's being shared with him, so make him pay his fair share of the taxes himself". Then you could each do your taxes declaring your 75% share and his 25% share.

[Wake up CALL]

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Otherwise, wait until file your taxes to determine how much you owe him.

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I find this to be most unreasonable. Suppose the OP dies and never files a tax return how would Slim get his share then? From reading the OP's post and answers I imagine he is in the 0% tax bracket and should give his backer 25% of the win after the toke.

[tyler_cracker]

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Suppose the OP dies and never files a tax return how would Slim get his share then?

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Y'know, i wasn't really sure what kind of responses i would get in this thread, but i never would have imagined that they might include the contemplation of my death. [img]/images/graemlins/crazy.gif[/img]

[Banks2334]

If you were such good friends you wouldn't even be asking this question. Give him 25%.

[itsmarty]

It sounds to me like Slim is both your friend and a good safeguard against going broke. Peel off 25%, make a subtle but unmistakeable mention of how you're covering the tax and tip, and move on. You'll be happier for it.

Regarding the jackpot tip, it sounded fine to me. Had you worked out 5% and then rounded down to $45, keeping the odd few dollars for yourself, I think it would have been inexusable. The round up with the extra browns seems reasonable.

Martin

[TomBrooks]

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Not surprisingly, the overwhelming majority believes in doing the right thing. This is particularly non-surprising since none of it is your money.

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I'm surprised this is even a question, but it goes to show that when big money is involved, relative and subjective to the parties involved, funny things can happen to prior agreements. I think your tip was very generous.

[AngusThermopyle]

933 - 53Tip - 250Tax = 630 your net.

$160 to $180. Since you are friends, make it an even $200.

Then decide what the agreement covers in such 'oddball' cases for the future.

[Slim Pickens]

Tyler drives my drunk ass around so I can spew chips throughout various Las Vegas poker rooms, so really, in a way, you all owe him. It seems like 25% is the concensus, so that clearly must include me being responsible for 25% of the tip. The tip was generous, but not overly so, in my opinion. $880 is the net from the jackpot since nothing was actually withheld for taxes right there, and we're each on our own as far as reporting to "the man" as we see fit. Right? Tyler subtracts anything he pays me from his session net and I add anything he pays me into my session.

It was great to see something good finally happen to you after about a million consecutive losing sessions. My favorite part was watching you try to pick up 7(?) racks of chips, refusing any help on the grounds of "how often do I get to carry 7 racks to the cashier?"

Also OMGWTF GOLD COAST OLD NITS SELLING THEIR CHILDREN FOR A SETUP WTF WHY PLAY THERE? How should I get my 2/4 hold them bankroll to Vegas to gamble underage fake ID staying at Luxor anyone ever heard of it... cocktail waitress... gasp... hijack... lol.

[bav]

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$880 is the net from the jackpot since nothing was actually withheld for taxes right there, and we're each on our own as far as reporting to "the man" as we see fit. Right?

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no. Tyler is stuck right now with a W2G that says he got $930. IRS is gonna be PO'd if he doesn't report $930 of gambling income this year. So "you guys" are paying the IRS, like it or not. This isn't a "as you see fit" thing. You're stuck with it.

So either y'all do a 5754 and each pay your income tax separately (way too much bother), or you just make a guess as to how much income tax Tyler will owe on this. If you live in Nevada, and make a middle-class income, it's gonna be 25%.

So the net to Tyler is $933 * 0.75 - $53. By my probably broken-in-some-way reckoning, he owes you $162 for the jackpot.

[bav]

And I thought everybody in town capped their high hand jackpots at $599 just to avoid the W2G silliness. Gold Coast is the first I've heard that doesn't.