US Taxes

[PerDoom]

I was curious from the people that make 100% of their income from poker/gambling, what % do you pay on income tax? I talked to some people, and they all said around 44%. That seems a little high.

[thing85]

Umm...depends on your tax bracket. Go to the IRS website and look up the tax bracket charts.

[Pokeraddict]

I thought that 35% was the highest bracket and that would only be for the amount of money over $250,000ish. Filing as a pro and paying the self employment tax could potentially put you up that high for players that won large amounts of money. If it is a hobby then you avoid the 15.3% self employment tax which you get to deduct so it is only about 11-12%.

[cardcounter0]

Fed Tax Rate of 35%, Social Security, Medicare, State, Local, so 40%+ sounds about right.

And the 50% some left over, you can use to start paying sales tax and taxes on gas, and fees, and licenses, etc., etc.

If you don't spend it all at once, and it earns some interest before you use it to pay your property taxes or something, then you will owe some tax on that too.

[MicroBob]

I understand that I have to pay taxes and sometimes have to pay taxes on my taxes.

But I would like to pay taxes on the taxes on my taxes and I'm still trying to figure out how to do that.

[TheMetetron]

I paid about 55% when I lived in CA.

15% Self Employment
9% California Sales Tax
30-something% US Tax

Edit: That was only up to $90k I think. After that it was 2% not 15% Self Employment. Weird to see your taxes decrease the more you make.

[MicroBob]

[ QUOTE ]
After that it was 2% not 15% Self Employment.

[/ QUOTE ]


Interesting. Wasn't aware of that (because it didn't apply to me).

Really need to get an accountant or something.

I'm really freaking ignorant on a lot of this stuff.

[TheMetetron]

I think Social Security is the one that drops out after a certain point. It may have been something else as well. I remember you only owed 1.9% Medicaid after ~$90k.

[Sniper]

[ QUOTE ]
I think Social Security is the one that drops out after a certain point. It may have been something else as well. I remember you only owed 1.9% Medicaid after ~$90k.

[/ QUOTE ]


This is correct, there is a cap on earnings subject to social security tax, which increases every year.

[DrPhysic]

FICA is 6.2%. That amount is matched by your employer. If you are self employed, as I have been for about 20 years, you get to pay both halves ie: 12.4%.

The FICA only applies to the first $94,200 for 2006. (2007 will be $97,500) of income then it disappears. Note: If you are married and both work, that's EACH.

The other factor is Medicare. It is 1.45%. Also employer matched. If you are self employed it is 2.90%. That NEVER disappears.

So your rate is 15.3% up to $94,200 and 2.9% after that, plus your income tax.

That's if you're smart enough to have any income after all the taxes.

Doc