Taxes situation, complicated.

[partygirluk]

Currently reside in the UK. Pay 0 tax on poker winnings. Want to do PhD in States. U.S citizens pay tax on poker winnings. This sucks. Most of my poker winnings I would save up, until the day I decide to buy a property. I currently have a US$ account registered in the U.K. Have no idea if I would be able to keep it if I moved abroad.

Anyway, the sums we are talking about could be significant enough to deter me from studying in the U.S, but I do really really want to. What are my options? What is the tax rate?

Thanks,

Dean [img]/images/graemlins/confused.gif[/img]

Here is last year's income tax rate schedule.

Different states also have different tax rates. Some, like TX have no income tax.

[lucas9000]

i think you would be well advised to consult a tax attorney. it would cost you some money, but getting the correct information will likely save you more in the long run considering your situation.

[partygirluk]

[ QUOTE ]
Here is last year's income tax rate schedule.

Different states also have different tax rates. Some, like TX have no income tax.

[/ QUOTE ]

Does gambling count as income? i.e. if a Texas resident won the lottery, would he have to pay tax?

Yes, gambling winnings count as income according to the IRS. I think you misunderstood me about the state income tax.

Most state's have a state income tax that must be paid by residents on top of the federal income tax. A few states such as, Texas have no state income tax at all. I think our sales tax is a little higher here in Texas to compensate for the lack of a state income tax.

Note however, that the IRS has no way to access pokersite's records to see exactly what your income is. If they decide to audit you though, they can utilize the paper trail from your banking institution to deduce your income.

[partygirluk]

What if my account was not located in the U.S?

I'm going to preface this with a big "I'm not sure."

But I don't believe the IRS can legally demand records from any foreign institutions. However, they may be able to trace any transfers from your foreign account to your physical location. I don't know if they'd be able to deduce that it is income though.

Remember, I'm not a tax professional though.

[partygirluk]

OK. So say I make $100K in a year. I withdraw $20K of that to my U.S account to pay for living expenses. I transfer the $80K to an offshore account. They will tax me on the 20K, but not the 80, right? And lets say I do this for 3 years, and have 240 in my account (ignoring interest). I then want to buy a house and want to spend that 240k on it. How can I do so without the IRS finding out that I should have been paying tax on that 240K?

[nothumb]

I think you'll be in the clear on this. As a foreign student you would probably have a student visa and you might not even be allowed to work, aside from under the terms of any assistantship you might have. They wouldn't expect you to file taxes if this was the case. I would check with US Immigration or whomever issues those visas, and find out what the law is regarding work under a student visa. As it stands, the IRS might not be expecting you to work, and therefore can't expect you to file.

EDIT: Basically, the IRS taxes income, not holdings of foreigners. If you were asked any questions about it, tell them it's savings or a trust fund, and it's not US income. They can't tax you on it if they can't prove you made that money in the USA.

NT

[Brainwalter]

You're going to become a US citizen for this PhD? If not I don't think you have any problems.