8b. Re: 25% poker withholding
Posted by: "Marksalot300@aol.com" Marksalot300@aol.com marksalot300
Date: Thu Sep 6, 2007 3:02 pm ((PDT))I believe that's correct, and it sounds like (from Jean's recent posts) that
Ohio is the same way. So is Michigan. I talked to a guy a couple of years
ago who had a net loss of $20,000 but still had to pay the State a couple of
thousand in income tax on his "winnings". Plus, in Michigan, there is a
Homestead Property Tax Credit, a rebate of sorts that is indexed to income.
Snag
a few W2G's and your "rebate" goes right in the tank, almost a form of
double taxation on income that may not exist at all.- Brian in MI
In a message dated 9/6/2007 3:21:39 P.M. Eastern Daylight Time,
jbecker11@charter.net writes:It could be worse, from what I understand Illinois does not allow any
offset for your losses and they want 3 or 6% of every w2g regardless
of whether you win or lose at the end of the year.
Indiana too - 3.4% current rate. It definitely makes the after-tax EV of VP negative above the $1 level, and also, I think, at the $1 level where the royal is the only W2G event -- even if you assume that the ONLY wins you report are the W2G ones, and that you have losses exceeding your wins to completely wipe out any federal tax obligation.
If there are players out there who only report their W2G income and not the rest of their wins, I think you are at substantial risk if audited; it just isn't very believeable that you never win except for jackpots.
I still play $1 level, but $0.25 makes more sense with the state tax situation. Even $0.25 multi-play would limit the exposure, although W2G events are possible on multi-play depending on number of hands being played, what's dealt, and how lucky the draws are.
--BG
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