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| View Poll Results: Comedy (in alphabetical order) | |||
| Cheers |
   
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5 | 5.49% |
| Frasier |
  
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4 | 4.40% |
| M*A*S*H |
  
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2 | 2.20% |
| Seinfeld |
  
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47 | 51.65% |
| Simpsons |
  
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33 | 36.26% |
| Voters: 91. You may not vote on this poll | |||
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#81
08-26-2005, 10:15 AM
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Re: Who Pays Taxes on Poker Earnings? (POLL)
[ QUOTE ]
Does anyone here report as a professional poker player? and if so - do you do your own tax work with a software? and if so, what kind of tax software do you use?? [/ QUOTE ] I have before. I would use TurboTax. I believe it will fill out a Schedule C and calculate the self-employment tax you owe. 
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#82
08-26-2005, 12:18 PM
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Re: If the \"FairTax bill passes
[ QUOTE ]
The Fairtax does not account for any income. It is not an income tax, it is a consumption tax. [/ QUOTE ] I know that. My point is that it is more fair for gambling although worse in most other regards as a revenue-collection mechanism. [ QUOTE ] You haven't researched 1 word of the Fairtax and you're condeming it. [/ QUOTE ] What are you talking about? I've argued this with other FairTax shills and consider myself more well-read on this proposal than most. [ QUOTE ] No corporations pay tax. If you need to understand why. (image deleted) Any taxes you think corporations pay are paid from the income of it's customers. And if the taxes increase the corporation increases it's pricing. (unless it's a commercial airline) [/ QUOTE ] You really missed the point of my critique, which had you understood you would have realized that I am well-read on the subject. Krazy Dan Independent Contractors, Inc. charges ABC Company $50,000 for services rendered, nontaxed. The KDIC buys a car for partial business use, gets some tax relief for it. KDIC moves to a larger apartment to put in a home office, and gets partial tax credit for it. KDIC has a party in his home for his clients and receives a business tax rebate on the food and entertainment. While, if instead of incorporating, Krazy Dan works for ABC company, he receives $50,000 for services rendered, nontaxed. Krazy Dan buys a car so he can go to work, but he has to pay the full 23% tax. Krazy Dan moves to a bigger apartment so he can work at home, but he still has to pay the full 23% tax. Krazy Dan invites his co-workers and bosses over for a party, but once again pays the full 23% tax. Can you see the difference? Why don't I expand on this further? My father will be really happy that the money in his Roth IRA will be double taxed when he withdraws on it later in life -- taxed when he originally earned the money and taxed when he spends it. He'll be really happy when the money he receives in Social Security benefits will be subject to tax, too. The two groups of people with the highest proportion of disposable income -- teenagers and the very wealthy -- now have disincentive to spend and less spending certainly is not good for the economy. While the money held by the wealthy will eventually be spent (either by them or by their heirs decades in the future), the tax faces decreased utility as inflation and time value of money lowers its value. I have severe doubts that a 30% tax rate, let alone 23%, would cover government expenses (all else equal). [ QUOTE ] [ QUOTE ] It's not even a bill yet, is it? [/ QUOTE ] Yes it is H.R. 25 introduced Jan 5 2005 [/ QUOTE ] Thank you for sharing that. I now have to write my representative.
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#83
08-26-2005, 09:58 PM
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Re: If the \"FairTax bill passes
[ QUOTE ]
[ QUOTE ] The Fairtax does not account for any income. It is not an income tax, it is a consumption tax. [/ QUOTE ] I know that. My point is that it is more fair for gambling although worse in most other regards as a revenue-collection mechanism. [ QUOTE ] You haven't researched 1 word of the Fairtax and you're condeming it. [/ QUOTE ] What are you talking about? I've argued this with other FairTax shills and consider myself more well-read on this proposal than most. [ QUOTE ] No corporations pay tax. If you need to understand why. (image deleted) Any taxes you think corporations pay are paid from the income of it's customers. And if the taxes increase the corporation increases it's pricing. (unless it's a commercial airline) [/ QUOTE ] You really missed the point of my critique, which had you understood you would have realized that I am well-read on the subject. [/ QUOTE ] OK I guess I did misunderstand. I think it was confusing the first time you wrote it. [ QUOTE ] Krazy Dan Independent Contractors, Inc. charges ABC Company $50,000 for services rendered, nontaxed. The KDIC buys a car for partial business use, gets some tax relief for it. KDIC moves to a larger apartment to put in a home office, and gets partial tax credit for it. KDIC has a party in his home for his clients and receives a business tax rebate on the food and entertainment. While, if instead of incorporating, Krazy Dan works for ABC company, he receives $50,000 for services rendered, nontaxed. Krazy Dan buys a car so he can go to work, but he has to pay the full 23% tax. Krazy Dan moves to a bigger apartment so he can work at home, but he still has to pay the full 23% tax. Krazy Dan invites his co-workers and bosses over for a party, but once again pays the full 23% tax. [/ QUOTE ] OK, here you have 2 different situations. A business and an individual. KD Inc would still not pay tax on income under the "Fairtax". In addition, KD Inc would no longer have to spend time and money on prpareing a tax return. And business to business sales would not be taxed. <font color="blue">On top of that, under the current system if KD Inc doesn't pay taxes and gets credit for expenses, that is money taken from other individuals who have earned it and given to KD Inc. That is not a fair tax.</font> Now as far as Krazy Dan working for ABC company, how is he getting away with not having income tax deducted from his $50,000 in services rendered? Lets assume payroll tax is being deducted from his paycheck under the current system. After the "Fairtax" he will get his paycheck with no Federal, SS, or medicare taxes taken out. He will have more money to save (which he will not be taxed on the earnings) and spend. He can spend up to the poverty level and receive a "prebate" check from the feds every month equal to the taxes paid up to the poverty level. (this could include things used at the dinner party)Dan can buy a used car and not pay 23% tax on it. [ QUOTE ] Can you see the difference? Why don't I expand on this further? My father will be really happy that the money in his Roth IRA will be double taxed when he withdraws on it later in life -- taxed when he originally earned the money and taxed when he spends it. He'll be really happy when the money he receives in Social Security benefits will be subject to tax, too. [/ QUOTE ] This is a downfall. Any money already in those accounts will be taxed again when used for consumption. But any future money put into a retirement account will go in with untaxed money and the earnings will not be taxed. <font color="red"> Not flaming you but for someone who claims to be well read on the subjuct you really seem to misunderstand alot. </font>
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#85
08-28-2005, 09:00 AM
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Re: If the \"FairTax bill passes
[ QUOTE ]
[ QUOTE ] Krazy Dan Independent Contractors, Inc. charges ABC Company $50,000 for services rendered, nontaxed. The KDIC buys a car for partial business use, gets some tax relief for it. KDIC moves to a larger apartment to put in a home office, and gets partial tax credit for it. KDIC has a party in his home for his clients and receives a business tax rebate on the food and entertainment. While, if instead of incorporating, Krazy Dan works for ABC company, he receives $50,000 for services rendered, nontaxed. Krazy Dan buys a car so he can go to work, but he has to pay the full 23% tax. Krazy Dan moves to a bigger apartment so he can work at home, but he still has to pay the full 23% tax. Krazy Dan invites his co-workers and bosses over for a party, but once again pays the full 23% tax. [/ QUOTE ] OK, here you have 2 different situations. A business and an individual. [/ QUOTE ] Actually, it's not. It's the same situation, except under the KDIC label the work agreement is as a consultant rather than as an employee. Because KDIC is a company providing consulting services, it qualifies for tax rebates for business expenses that KD the employee wouldn't. [ QUOTE ] In addition, KD Inc would no longer have to spend time and money on prpareing a tax return. [/ QUOTE ] H.R. 25 Section 903(c) disagrees with you, although the return would be obviously simpler. And mind you, there would be a dozen returns a year. [ QUOTE ] And business to business sales would not be taxed. [/ QUOTE ] That's the whole point of the independent contractor problem that I described earlier. If you can structure your employment as a consultant or independent contractor, you are able to avoid paying portions of tax on things like automobiles, fuel, and food. Here's another related, albeit different, example. BobCo is a real estate manager which builds new houses, leases them, and then sells them a couple years. Sounds normal, right? But BobCo has created a market in which a house that would have provided tens of thousands of dollars in tax revenue might only provide a couple thousand, and BobCo profits the difference. In numbers, BobCo builds a $200,000 house (paying no tax), leases it for a few years (where taxes are remitted to the government), and the house depreciates in value for some reason to $190,000. It still sells for $240,000 on the open market because building a new, equivalent house and selling it to a private citizen would cost $247,000 including FairTax. BobCo made $50,000 on real estate that declined in value, all money sheltered from tax, because it is sheltered from tax. [ QUOTE ] <font color="blue">On top of that, under the current system if KD Inc doesn't pay taxes and gets credit for expenses, that is money taken from other individuals who have earned it and given to KD Inc. That is not a fair tax.</font> [/ QUOTE ] Are you talking about Net Operating Loss, which is the only thing I can think of that you are referencing? That's actually one of the most fair aspects of the current tax system. [ QUOTE ] Dan can buy a used car and not pay 23% tax on it. [/ QUOTE ] Dan can buy a new car and not pay the full tax on it when he is a consultant and not an employee. [ QUOTE ] <font color="red"> Not flaming you but for someone who claims to be well read on the subjuct you really seem to misunderstand alot. </font> [/ QUOTE ] Ah, yes, I misunderstand the subject because I'm not supportive of it. If you would like me to further explain the problems with FairTax, could we please do this via private message, as this is a serious derail from the pretty much dead thread?
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#86
08-28-2005, 09:51 AM
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Re: If the \"FairTax bill passes
The big problem with the Fair Tax is that the IRS will still exist to monitor the collection of sales tax. Many people think that the Fair Tax will get rid of the IRS, but this is not the case. The IRS or some similar agency will still be out there to do audits of the people collecting the tax.
I have been a part of many audits and sales tax audits are far worse to deal with than income tax audits. There is no comparison between the two. The burden on corporations under a sales tax audit border on ridiculous. I can only imagine what the audit rate would be on corporations once the income tax is abolished. All of those auditors with time on their hands from no individual tax returns can't be a good thing.
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#87
08-28-2005, 03:47 PM
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Re: If the \"FairTax bill passes
[ QUOTE ]
[ QUOTE ] [ QUOTE ] Krazy Dan Independent Contractors, Inc. charges ABC Company $50,000 for services rendered, nontaxed. The KDIC buys a car for partial business use, gets some tax relief for it. KDIC moves to a larger apartment to put in a home office, and gets partial tax credit for it. KDIC has a party in his home for his clients and receives a business tax rebate on the food and entertainment. While, if instead of incorporating, Krazy Dan works for ABC company, he receives $50,000 for services rendered, nontaxed. Krazy Dan buys a car so he can go to work, but he has to pay the full 23% tax. Krazy Dan moves to a bigger apartment so he can work at home, but he still has to pay the full 23% tax. Krazy Dan invites his co-workers and bosses over for a party, but once again pays the full 23% tax. [/ QUOTE ] OK, here you have 2 different situations. A business and an individual. [/ QUOTE ] Actually, it's not. It's the same situation, except under the KDIC label the work agreement is as a consultant rather than as an employee. Because KDIC is a company providing consulting services, it qualifies for tax rebates for business expenses that KD the employee wouldn't. [/ QUOTE ] which makes it 2 different things. In one situation it's a small business and the other situation it's an employee who doesn't receive the benefits of being a small business. Different rules. [ QUOTE ] In addition, KD Inc would no longer have to spend time and money on prpareing a tax return. [/ QUOTE ] [ QUOTE ] H.R. 25 Section 903(c) disagrees with you, although the return would be obviously simpler. And mind you, there would be a dozen returns a year. [/ QUOTE ] That is not about tax return paper work. That section is dealing with reporting income so you can get the correct amount of Social Security paid to you when you are elegible to receive it. [ QUOTE ] And business to business sales would not be taxed. [/ QUOTE ] [ QUOTE ] That's the whole point of the independent contractor problem that I described earlier. If you can structure your employment as a consultant or independent contractor, you are able to avoid paying portions of tax on things like automobiles, fuel, and food. Here's another related, albeit different, example. BobCo is a real estate manager which builds new houses, leases them, and then sells them a couple years. Sounds normal, right? But BobCo has created a market in which a house that would have provided tens of thousands of dollars in tax revenue might only provide a couple thousand, and BobCo profits the difference. In numbers, BobCo builds a $200,000 house (paying no tax), leases it for a few years (where taxes are remitted to the government), and the house depreciates in value for some reason to $190,000. It still sells for $240,000 on the open market because building a new, equivalent house and selling it to a private citizen would cost $247,000 including FairTax. BobCo made $50,000 on real estate that declined in value, all money sheltered from tax, because it is sheltered from tax. [/ QUOTE ] You're making my head hurt because that makes no sense. [ QUOTE ] <font color="blue">On top of that, under the current system if KD Inc doesn't pay taxes and gets credit for expenses, that is money taken from other individuals who have earned it and given to KD Inc. That is not a fair tax.</font> [/ QUOTE ] [ QUOTE ] Are you talking about Net Operating Loss, which is the only thing I can think of that you are referencing? That's actually one of the most fair aspects of the current tax system. [/ QUOTE ]How can it be fair for someone not to pay taxes and yet receive money from the government in the form of taxes taken from someone else.[ QUOTE ] [ QUOTE ] Dan can buy a used car and not pay 23% tax on it. [/ QUOTE ] Dan can buy a new car and not pay the full tax on it when he is a consultant and not an employee. [ QUOTE ] <font color="red"> Not flaming you but for someone who claims to be well read on the subjuct you really seem to misunderstand alot. </font> [/ QUOTE ] Ah, yes, I misunderstand the subject because I'm not supportive of it. If you would like me to further explain the problems with FairTax, could we please do this via private message, as this is a serious derail from the pretty much dead thread? [/ QUOTE ]
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#88
08-31-2005, 10:14 AM
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Re: Who Pays Taxes on Poker Earnings? (POLL)
Mempho,
Thanks for the nice post. I still can't figure out what kind of difference in taxes we are talking about in between declaring net profit or winning losing session. Could someone (probably Mempho) run down this example and see how much money you would actually pay declaring one or the other. Lets say You have salary 60K You played last year and made 20K net ( 50k win 30k loss) How much taxes you will pay if you file net? ( I know you can't but for the sake of comparison) 60 + 20 How much taxes you will pay if you file +w -l? 60+ 50 (-30) If you have mortage or other itemized deduction makes +w -l declaring better because you have eliminated your standard deductions anyway? Thanks Nrogi
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#90
08-31-2005, 11:34 AM
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Re: Who Pays Taxes on Poker Earnings? (POLL)
At the income levels that you are talking about, the difference in tax is minimal. The things that you lose are the AGI sensitive items such as: ability to contribute to a Roth IRA, education credits, and student loan interest deduction.
Once your AGI crosses $150k (using a round number here), you start to lose your other itemized deductions due to phaseouts. I ran the round numbers for a single person and the tax under the net method was just under $15k with no other itemized deductions. The correct reporting came to a tax of about $16k. If you already itemize due to other deductions, I got the exact same tax due.
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