Taxes in California for Pro Gambler
 

This is my first year as a pro gambler and I was told that I was going to have to owe 44%, 9% state tax, 35% income tax.
I will have deductions but this will not account for much and if this is true I will be getting torn a new one.

Is it really this bad?!?

Re: Taxes in California for Pro Gambler
 

Worse, actually. If you're filing as a pro, then you owe about 17-18% in social security and medicare taxes. And since it's California, you get to pay some other employment taxes. Depending on which city you're in, you may find they require you to get a business license and then they'll tax you some more. Unless you really, really, like living in California, or are making so much money you don't care about the taxes, move out.

Re: Taxes in California for Pro Gambler
 

Wo is this for real? Best case scenario you keep 39% of your winnings? Thats absurd!

Re: Taxes in California for Pro Gambler
 

Can I move out this year and save myself a quick 100k?

Re: Taxes in California for Pro Gambler
 

No one pays 35% in federal income tax.

If you make more than $325,000 or something, the amount over that is taxed at 35%.

Re: Taxes in California for Pro Gambler
 

[ QUOTE ]
This is my first year as a pro gambler and I was told that I was going to have to owe 44%, 9% state tax, 35% income tax.
I will have deductions but this will not account for much and if this is true I will be getting torn a new one.

Is it really this bad?!?

[/ QUOTE ]

The numbers you quote are probably the top marginal rates. You would only pay that on any money above and beyond the top tier of income, probably around $100K or so. The money you make below that level is taxed at a lower rate.

Re: Taxes in California for Pro Gambler
 

If you were in my posiiton, would it be a good idea to put one or two hundred k in the retirement account??

Re: Taxes in California for Pro Gambler
 

[ QUOTE ]
If you were in my posiiton, would it be a good idea to put one or two hundred k in the retirement account??

[/ QUOTE ]
If you have one or two hundred k to put in a retirement account, then you should spend a couple of k on tax advice from professionals.

Re: Taxes in California for Pro Gambler
 

No, if you spend enough of the year residing in CA then you are liable for CA state taxes.

Re: Taxes in California for Pro Gambler
 

No. Social security tax is capped at around $90K, and the federal marginal rates below $90K are well under 35%.