yet another tax question

ConfusedONE

ok say you win the WSOP 2004

u win $5 Million and get taxed the 30%

so approx. how much of the tax witheld can u recover? :shock:

thanks,
CO :shock:

ScottyZ

so approx. how much of the tax witheld can u recover?

I believe if you're a Canadian, theoretically all of it.

But what's unclear to me is if a poker tournament win counts as some kind of income on your Canadian tax return or not.

Simply recovering the money it not enough. You also need to know whether or not your winnings count as some form of taxable income.

u win $5 Million and get taxed the 30%

It's important to note that the 30% figure is not actually tax. If you are required to pay U.S. income tax, the actual amount of tax you pay for the year is detemined by lots of things--- 2004 tax law, your total income, if you make tax-sheltered investments, or somehow get tax deductions, etc.

I believe a poker tournament win would be classified as income in the U.S., and the 30% withheld constitutes a payment towards your U.S. income tax for that year.

As an example, let's say you win $5 million at the 2004 WSOP. Binion's, on behalf of the IRS, collects $1.5 million from the winnings and hands you $3.5 milllion in cash. (Or you possibly arrange payment using some other method.)

Now, say that your income tax for 2004 turns out to be $2.6 million. Then (assuming you have paid no other withholding taxes), you still owe $1.1 million in income tax.

If, on the other hand, your 2004 income tax somehow turns out to be a mere $800,000 then you are due a tax refund of $700,000.

ScottyZ

ConfusedONE

ScottyZ wrote:

Now, say that your income tax for 2004 turns out to be $2.6 million. Then (assuming you have paid no other withholding taxes), you still owe $1.1 million in income tax.

If, on the other hand, your 2004 income tax somehow turns out to be a mere $800,000 then you are due a tax refund of $700,000.

ScottyZ

where ya get the numbers from? :shock:

i mean the $1.1 m and $800 k :?

ConfusedONE

here's a stuped question

you win $195,000 US at a WPT event at the Bellagio:

do you have to file tax return in both countries :shock:
or just Canada :?

i've never won any significant amount so i dont know

ScottyZ

ConfusedONE wrote:

ScottyZ wrote:

Now, say that your income tax for 2004 turns out to be $2.6 million. Then (assuming you have paid no other withholding taxes), you still owe $1.1 million in income tax.

If, on the other hand, your 2004 income tax somehow turns out to be a mere $800,000 then you are due a tax refund of $700,000.

ScottyZ

where ya get the numbers from? :shock:

i mean the $1.1 m and $800 k :?

As indicated by "say that", and "somehow turns out to be", I just made the numbers up.

Well, okay, I got the $1.1 million by subtracting $1.5 million (the withheld amount) from $2.6 million (which I made up).

ScottyZ

ConfusedONE

ScottyZ wrote:

ConfusedONE wrote:

ScottyZ wrote:

Now, say that your income tax for 2004 turns out to be $2.6 million. Then (assuming you have paid no other withholding taxes), you still owe $1.1 million in income tax.

If, on the other hand, your 2004 income tax somehow turns out to be a mere $800,000 then you are due a tax refund of $700,000.

ScottyZ

where ya get the numbers from? :shock:

i mean the $1.1 m and $800 k :?

As indicated by "say that", and "somehow turns out to be", I just made the numbers up.

Well, okay, I got the $1.1 million by subtracting $1.5 million (the withheld amount) from $2.6 million (which I made up).

ScottyZ

LMAO

that's why i'm the ConfusedONE :shock:

MiamiKeith

Well, okay, I got the $1.1 million by subtracting $1.5 million (the withheld amount) from $2.6 million (which I made up).

Did you use a calculator?

Keith

ConfusedONE

MiamiKeith wrote:

Well, okay, I got the $1.1 million by subtracting $1.5 million (the withheld amount) from $2.6 million (which I made up).

Did you use a calculator?

Keith

:shock: :shock: :shock: