#1
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Tax Questions
Hi,
I am planning to start paying taxes in the US (I used to live in another country and I am not a US citizen). My entire income has come from on-line poker for the last five years. 1) I live in California. If I file as a professional player (and I am going to), how much would I pay in taxes? It is my understanding that the federal tax is will be around 15%, but I also have to pay state tax, right? 2) Do those of you who file as a pro in a state without state income tax (like Florida or Texas) only pay the federal tax? 3) If 2 is true, shouldn't all professional internet poker players move to these states, if their situation permits it? I have tried to find the answer to this in the archives and in the rest of the "series of tubes". |
#2
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Re: Tax Questions
1. The 15% (up to your first $94K of income) is your "self-employment tax", which is in addition to your federal income tax. Federal tax is progressive, i.e. the more you make the higher a percentage you pay. It currently ranges from 10% to 35%. You will also have to pay state tax.
2. Again, the SE tax plus the federal income tax. 3. States get their money somehow, through a combination of income tax, sales tax, property tax, etc. I'm currently in Oregon, where we have no sales tax but the income tax is huge. From what I remember, Texas property taxes are rather high. |
#3
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Re: Tax Questions
Bluffe,
Assuming you made exactly 100K, your tax bill would look roughly like this: 15.3% on the first 94,000, +2.9% on the last 6,000 (however, half of the 15.3% is deductible from income, so your adjusted gross income would only be ~92,500) plus federal income tax (in 2006, $22,332) plus CA income tax (for anyone making over 40K, this is a flat 9.3%, or 9300) So, as you can see, you owe in the neighborhood of 45K in taxes. Yes, this provides a solid incentive to move to (in your case) Nevada or Oregon. |
#4
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Re: Tax Questions
dude, goto an accountant, don't be a cheap m'fer
lol @ asking for tax advice on 2p2 even the guy who wrote that article didn't know wtf he was talking about...goto a cpa who knows what hes doing |
#5
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Re: Tax Questions
[ QUOTE ]
Bluffe, Assuming you made exactly 100K, your tax bill would look roughly like this: 15.3% on the first 94,000, +2.9% on the last 6,000 (however, half of the 15.3% is deductible from income, so your adjusted gross income would only be ~92,500) plus federal income tax (in 2006, $22,332) plus CA income tax (for anyone making over 40K, this is a flat 9.3%, or 9300) So, as you can see, you owe in the neighborhood of 45K in taxes. Yes, this provides a solid incentive to move to (in your case) Nevada or Oregon. [/ QUOTE ] Thank you adanthar, this was exactly the kind of response i was hoping for. Yes that would mean more than 45k taxes for me (if previous years have been any indication). And I thought that US was a low tax country. [img]/images/graemlins/smile.gif[/img] |
#6
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Re: Tax Questions
[ QUOTE ]
dude, goto an accountant, don't be a cheap m'fer lol @ asking for tax advice on 2p2 even the guy who wrote that article didn't know wtf he was talking about...goto a cpa who knows what hes doing [/ QUOTE ] So much noise on 2+2 these days. |
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