Gambling tax questions
July 11th, 2020 at 9:10:21 AM
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A site online says, each state has different rules. In Maryland, for example, you must report winnings between $500 and $5,000 within 60 days and pay state income taxes within that time frame.
This seems absurd that you would have to report gambling winnings within 60 days. Shouldn't you just have to do it at tax time once a year?
I'm assuming that you have to pay state income taxes based on the state where you won, not the state you live in, because that's what I've read. So, if you win $5,000 at table games at a casino in California, how much would you be taxed (for state taxes)? Do their state income tax rates apply to this?
If so, how do you determine your tax bracket for that state that you don't live in? Would the tax bracket they put you in be based on your total income in all states or just the amount of money you won/your income in that specific state (California)?
This seems absurd that you would have to report gambling winnings within 60 days. Shouldn't you just have to do it at tax time once a year?
I'm assuming that you have to pay state income taxes based on the state where you won, not the state you live in, because that's what I've read. So, if you win $5,000 at table games at a casino in California, how much would you be taxed (for state taxes)? Do their state income tax rates apply to this?
If so, how do you determine your tax bracket for that state that you don't live in? Would the tax bracket they put you in be based on your total income in all states or just the amount of money you won/your income in that specific state (California)?
July 11th, 2020 at 11:29:02 AM
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In most states, the state income tax is a flat rate, not a progressive tax with "Brackets" that is based on your income. You just pay a 6% tax on the income you made in their state or whatever their relevant state income tax rate is.
Many states have reciprocal agreements with each other about state taxes and income earned within the other state. You need to check (on the internet) whether income in Maryland or California is taxed by your state or by those states.
What seems absurd to you may be based on your inexperience. When you are self-employed you are required to pay (estimated) federal taxes four time a year and then reconcile it with an annual tax filing -because there is no "withholding" from a salary payment. As a Gambler, you are essentially self-employed, and you are pretty much required to pay taxes on whatever schedule that the state and feds say you must.
Welcome to the real world.
Many states have reciprocal agreements with each other about state taxes and income earned within the other state. You need to check (on the internet) whether income in Maryland or California is taxed by your state or by those states.
What seems absurd to you may be based on your inexperience. When you are self-employed you are required to pay (estimated) federal taxes four time a year and then reconcile it with an annual tax filing -because there is no "withholding" from a salary payment. As a Gambler, you are essentially self-employed, and you are pretty much required to pay taxes on whatever schedule that the state and feds say you must.
Welcome to the real world.
So many better men, a few of them friends, are dead. And a thousand thousand slimy things live on, and so do I.
