Local Tax Confusion

Hi, a few months back I was fortunate enough to have a big tourney win, but now it has led to some confusing tax matters. I am a college student with no other income besides poker. I have already paid estimated taxes for federal and state, but am not sure what to do about local taxes. I have been living and paying rent in my college town for the past year, but my permanent address is still listed under my parents home address. Now their city tax is way higher than mine would be, and they have the addition of a school tax which my college city would not. Anyways, I heard that one must pay taxes to the city that is listed as their permanent residence, even if they don't live there. Is this true, or could I just pay the tax for the city that I have been living in since I have proof of residence there for the past year? Thanks in advance for info.

anyone with any info at all?????

[tubalkain]

You pay taxes to both.

There's a local office for the taxing entity. If you can't find it in the phone book, call the city hall number and ask the operator.

Your winnings/earnings may be less than the floor and you'll owe nothing.

You have local income tax?? Where do you live, Im going to make sure I dont move there.

[Guthrie]

I've never heard of a local income tax, but if was paying federal, state, and local income tax I'd move to Texas. Oh wait, I'm already there.

If you won a lot of money in a big tourney, spend a few bucks on a qualified tax professional.

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You have local income tax?? Where do you live, Im going to make sure I dont move there.

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Quite a few years ago NYC had it. Don't know if they still do.

[Niediam]

Give a couple hundred to a CPA so everything will be done right.

[broiler]

For those who are wondering, there are a couple of states that have the local income tax that I'm aware of. The 2 that come to mind are cities in Ohio and all of PA. Certain parts of Michigan as well have the local taxes. The one area that I'm aware of to also have a school tax is Eastern PA. There may be others, but these are thoughts off of the top of my head.

I have to agree with the sentiment that you need to find a CPA in the area who knows the technicalities of the tax structure for the schools and cities. The only thing that I know from these areas is that the rules are not uniform, so you might owe tax to neither, one, or both depending on the way the rules are written.

The last time I dealt with an issue like this was at least 3 years ago, so I don't feel comfortable saying any more than what I stated above. The tax laws are always changing, especially for the smaller taxes like school districts and cities. It would not be an overstatement to say that it is very important to find a person that knows these areas very well. You will find that these smaller taxing districts are much more active in hunting down unpaid taxes than the Federal or State governments.

I am a CPA, licensed in PA. In order to answer your question, I need to know what state(s) you and you parents live in. But, generally, you consider your parents home as yours for local tax purposes and thus pay taxes there. In PA however the local/school tax is only on earned income so poker winnings would not be taxable unless you filed as a professional, which given your situation you probably will not.