U.S. income tax: how much and where do Americans pay?

Lotto winnings tax

What does US income tax consist of?

U.S. taxes consist of
federal, state and local taxes. The first, how difficult it is
guess, all residents of the country pay, the second - residents of specific states,
still others - people from certain cities and districts. Local and state taxes
may be absent, but the federal will have to pay anyway. So that,
if you hear, pier, Texas cowboys do not pay income taxes, this is
means only that, that the state itself does not levy income tax. The IRS is not about you
will forget. Although it's fair to say, what of the income of cowboys
turn out much less, than, eg, poor Californians.

Well, now let's delve into
legislative jungle and deal with some of the features of the American
taxation. Let's start with the good news - only a fraction of what is taxed in the US
annual wages (the tax base). For every citizen - in
income dependence, marital status and other factors - there are
special tax deductions. for example, bachelor, dependents, may be not
pay tax on at least $ 10 000
from your annual income.

Additional bonuses can be obtained for paid health insurance, work in military structures, rental property, teaching children ... Yes, a lot for what else. There are so many tax deductions in the USA, that I even had to come up with the profession of a tax consultant. In the matter of honest tax evasion, this is an invaluable specialist., which will help you save well and will take some of this saved. And the first tip, which he will give, - never throw out checks, accounts, contracts and agreements. It is on their basis that most of the tax deductions are formed..

From the good news, let's move on to
information is not so rosy. The thing is, what's the US income tax
not only wages are taxed, but also any other income:

  • presents,
  • lottery or casino winnings,
  • dividends,
  • heritage,
  • part-time income
  • and even a tip.

Rates and rules of accrual
taxes on these categories of income are different - so here it is also better to use
with the help of a savvy tax advisor.

US lottery winnings tax

The United States is almost
the most "gambling" country in the world. At least, in the USA - the largest
prizes and huge coverage of the population with gambling. But in the United States - and
very developed, sophisticated tax collection system. Evade the state
fiscal machine is almost impossible, and if this happens, then in case
revealing the fact of evasion, a citizen can have very serious problems.

Even the actors
Hollywood, well-known entrepreneurs and government officials calmly
prosecuted under this article. Therefore the tax on
the lottery in the USA must be paid without fail and for this it is necessary already in advance
familiarize yourself with some aspects of the functioning of the American fiscal

If they pay in Russia
only income tax on lottery winnings, then in the United States the very fiscal
the system is more complicated, and the size of payments is higher. And in this regard, many people
interested in, what percentage of lottery winnings tax is paid in America.
After all, it is impossible to do without paying the due part to the state in this country
it will turn out, and nobody wants to make problems with the law.

Let's clarify, what tax
pay from lottery win in the USA.

Firstly, necessary
pay federal lottery income tax to the treasury of the United States. Exactly
he is a key part of the due payments. Lottery tax percentage in
anyway - 25% of the winnings. But, depending on the state,
the tax amount can be increased by 10-15%. Thus, will have to pay from
25% to 40% of the received winnings.

But in some states the size
lottery tax does not exceed 25%. In Texas and California, eg,
no additional payment will be charged, and in Michigan it is only + 4,35%
to those 25%, which winnings are subject to in any case.

Secondly, percent
tax on lottery winnings cannot exceed 40%, so even in the state
with the most stringent fiscal orders 60% winnings you can definitely pick up

Thirdly, in USA, as in
Of Russia, not every lottery amount is taxed. With winnings less 600 dollars
the state does not need to pay anything, so they can be obtained completely.

Many people are interested in, how much
people pay tax on lottery winnings, non-US residents. FROM
a non-resident does not require a certificate of income, therefore he has
the ability to take all the lottery winnings for yourself and leave the territory of the United
States. However, if this deception is revealed, then such a person may be deprived of
the opportunity to visit the United States in the future - he will simply be blocked from entering the country.

By the way, in such countries
like uk, France, Germany, Austria, Finland, Ireland question of
Tom, how much is the lottery taxed?, does not arise. The reason is pretty
loyal fiscal legislation of European countries. In these states
the lottery is not paid at all, so you can play it, without fear
the need to share with the fiscal authorities. By the way, from winning the lottery
no tax is paid in Belarus, neighboring Russia.

Responsibility for non-payment of tax

If you don't pay tax on your winnings, tax will charge a fine. Its size depends on the amount of debt. If the declaration is not submitted or is submitted later, a fine will be charged 5% per month from the amount of tax, but no more 30% of the total, to be paid to the budget. The minimum size cannot be less 100 rubles. P. 1 Art. 119 NK RF

The tax office may increase the fine up to 40%, if it finds, that the person deliberately evaded tax. If you continue to pull with the payment of the fine, daily will .

Penalty amount = Unpaid tax amount x 1/300 Refinancing rates of the Central Bank of the Russian Federation x Number of days of delay. In July 2019 year the refinancing rate is 7,5 %. Refinancing rate of the Central Bank of the Russian Federation

If you ignore the requirements, FTS will begin the collection process. Funds will be debited from the debtor's bank accounts. When there is no money in the accounts, may arrest real estate. Article 77 of the Tax Code

In case of large arrears, the tax office transfers materials to the police. Security officials will first conduct a pre-investigation check, during which they find out, is it worth starting a criminal case. If yes, then the guilty person could face up to one year in prison with a fine of 100-300 thousand rubles. Art. 198 UK RF

For failure to pay tax on a large scale, can put on 3 years and fined 200-500 thousand rubles. In this case, you still have to pay the previously assigned fine and interest.. A large tax debt is considered in the amount of:

  • 900 thousand rubles, if it exceeds 10% unpaid tax for three years;
  • 2,7 million rubles regardless of time and interest.

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Income taxes

Income tax in the USA is one of the highest in the world.

Table of the dynamics of changes in income tax in the United States

It's expensive to do business here, therefore, many manufacturers are moving production outside the USA. A country with a powerful economy, America can afford the status of the most demanding country in terms of tax collection.

  • Despite the fact that taxation is systematized, almost all authorities can set their own fees. However, there are special nuances;
  • So, eg, partnership will not be subject to corporate tax: each of the partners will file a declaration only for their own income;
  • The company can be exempted from tax collection in the event, if he does not have a checking account in America, and also if the company does not operate in the USA;
  • States, tax-exempt, can greatly simplify the task. However, one should consider, that federal fees remain the same.

At the same time, American companies are required to pay taxes even on those funds, earned abroad.
In order to eliminate the option of double payment of fees, US tax structure uses credit tax methodology. It means, what if the company, which operates abroad, experienced any tax costs there, then they can be reimbursed. Sure, only at the top of America's tax rate.

Difference between partnerships (the closest Russian synonym is partnership) and a corporation from the point of view of the tax service is very simple.

And each partner is calculated on tax charges independently. But with a corporation, the situation is different.: there is a tax on corporate plan profits, and in the same way, company owners will pay their own income tax. This also applies to shareholders.

Italy: while only the lucky ones from the lottery pay

In Italy, gaming companies are literally "hung up" with all kinds of taxes. They pay taxes common to all companies - income and regional taxes., get licenses for a tidy sum, and then calculated for specific taxes - from 0,6% from revenue for online casinos to 20% in cash games. Bookmakers pay 3,5%. At the same time, players are still exempt from taxation.. true, lottery wins in the amount of 500 euros 6-interest tax has already been imposed. Poker is next. There, you look, and it will reach bookmakers.

true, against the background of a very high tax burden, not all bookmaker companies decide to work in Italy. And players, respectively, also. Just a few months ago, the trial in the case of two Italians ended, Cristiano Blanco and Pier Paolo Fabretti. They placed their bets online with the bookmakers, officially registered in the EU, but not having an Italian license. The tax office tried to prove, that they are required to pay income tax on their winnings, since Italy received less from the unlicensed bookmaker. However, the European Court sided with the players, considering, that taxes from their participation in bets have already been paid by the bookmaker at the place of registration, in another EU country. And double taxation is illegal.

What taxes do firms pay

To basic taxes, paid by companies, relate:

corporate income tax;
sales tax;
property tax;
capital gains tax;

Regional and local governments may levy taxes on: capital gain, on retained earnings, on property, for mining, ecological, etc..

Besides, every company, serving as an employer, must register at all levels of government and pay deductions from the payroll – to regional and federal unemployment funds.

Different types of companies pay different types of taxes in the United States, and are also entitled to various deductions and benefits

therefore, especially at the planning stage of starting a business, it is important to thoroughly understand the taxation mechanism

How much and when to pay tax on winnings

According to the current Russian legislation, every citizen is obliged to pay tax on the income received.. In chapter 23 Tax Code of the Russian Federation indicates the amount in 13%. But the tax on winnings can be and 35%, if it's a stimulating lottery. IN 2017 year in the legislation there were changes, as a result of which a tax rate of 30%. Due to the fact presented, all the features of calculating tax on lottery winnings in Russia should be considered.

IN 2017 year was signed by Federal Law No. 354 of 1 january 2018 of the year. The new law specifies the separation of the types of drawings and lotteries, according to which it is determined, how much tax should the winner pay. At the moment there is 3 rates - 13%, 30% and 35%. 13% all persons pay on the winnings, who received a cash reward for participating in the lottery. 35% the bet applies to winnings from incentive lotteries. 30% everyone pays from the winnings, who is not a resident of Russia. (non-residents are people, who have Russian citizenship, but they live more time outside the country. The number of days is provided here - 183 during the following one after another 12 months. Less than the specified number of days entails an obligation to pay tax in the amount of 30%).

It is important to point out, how much tax on winnings is not paid at all. These are winnings up to 4 thousand

rubles. Remarkably, that all monetary awards for the last calendar year are taken into account.

Prize and winnings tax 2019 years up to 14 999 rubles are paid by the winners. In other words, they independently submit a declaration indicating their income. Further payment follows through the bank cash desk.

Tax on lottery and other winnings more than 15 000 rubles are paid independently by the organizers of the lottery. The winner receives the amount already minus the tax fee.
In determining the tax rate in the payment of the lottery, one should take into account its specifics and conditions of holding.

Russian winnings tax 2018 - indirect or direct tax?

Tax Code of Russia 20 january 2014 of the year was replenished with additions, regarding taxation of winnings at the bookmaker's office. According to these changes, all prizes won are subject to mandatory declaration by an individual and are subject to a state income tax of thirteen percent of the prize amount minus the bet made. In this case, a citizen of the Russian Federation is obliged to submit his declaration to the tax service no later than 30 April next year, which comes after a year of receiving the prize. The fee itself must be paid before 15 july. Thus, we see, that this income tax is direct, not indirect, since it is charged directly from an individual.

Tax on lottery winnings from what amount is charged?

In accordance with Article 228 NK (part I) thirteen percent personal income tax from a winning lottery ticket is charged regardless of the amount of the prize. It should also be noted, what with 1.07.2014 for a year, only the state has the right to hold any lottery draws on the territory of Russia. Thus, today all games of this type are state-owned.

Regarding incentive prize contests and promotions, which are held in supermarkets, shops and salons, then the happy owner of the gift, whose cost does not exceed 4 000 rubles, not obliged to pay VAT on it. This responsibility falls on the shoulders of the organizers of the competition..

For winnings at the bookmaker's office, how much interest is the tax?

The current Tax Code of the Russian Federation clearly defines, how much you need to pay as a percentage of VAT on the prize at the bookmaker's office. And this is again a tax in the amount 13 % of the principal minus the bet made.

In the lottery Russian Lotto

These types of lottery draws are quite popular in Russia., like "Russian Lotto", "Gosloto", "Stoloto" and "Golden Key". Therefore, many gamblers are interested in questions, what tax is paid on prizes and is it worth giving the state part of the money earned to the Russian lotto?

The answer is simple - payment of VAT is obligatory in this case., all winnings are taxable, which is paid to the winner by the responsible organizer.

A lucky player must pay a tax deduction of 13 % from the prize and sleep well.

Casino winnings are tax deductible?

Recently, online games have become incredibly popular, allowing you to spend your free time gambling, without leaving home. There is a huge variety of virtual casinos on the network, sweepstakes, poker card games, which offer visitors to gamble and promise fabulous prizes. However, now this kind of entertainment becomes even more expensive - in case of defeat, the player loses his money, and in case of victory - forced to give to the state 13 % from this income.

Lottery Car Winning Tax

happens, that an individual is so lucky, that the lottery manages to win not just a certain amount of money, but the whole car. Sure, joy at such a moment overrides all common sense, However, gathering up the courage, one should remember that, that there is no escape from paying the state fee for the prize. So the tax on car winnings is 35% from the cost of the car itself in Russia.

Now imagine how much you have to pay out of your own pocket for a luxurious gift. It is this fact, or rather, the clause of the Tax Code of the Russian Federation largely predetermines the desire of citizens to sell the car received in the lottery, in order to stay at least in some plus.

Dividend tax

Dividend, received in the USA, subject to tax. They can be taxed as part of the Income Tax return, ie. as part of income. The tax rate is up to 37% depending on the total amount of gross income and on the marital status of the taxpayer.

However, there is an option to tax dividends at reduced rates.. This is only possible in cases, when it comes to qualified dividends (this includes, eg, company dividends, whose shares are freely traded on major American exchanges). The tax rate will be 0, 15 or 20% depending on the amount of income.

The situation should be considered separately., when dividends are paid in a non-traditional way (in the form of funds), and by additional issue of shares. In this case, the shareholder has two options.: sell additional shares or leave them counting on the growth of quotations. Upon sale, you will need to pay income or asset gains tax. But in the case, if the shares will be added to the securities portfolio, they will not be taxed at all.

Gift tax (Gift Tax)

Gratuitous transfer of property (cash, shares, shares in the company, the property) may be taxed on gifts.

The rate can go up to 40%. However, in the vast majority of cases, you will not have to pay gift tax.. The main thing is to use the benefits correctly, stipulated by tax legislation. The annual non-taxable minimum is 15 thousand. dollars. Ie. for this amount a person can make gifts to absolutely any person during the year.

But even if the gift to one person is more than this amount, it doesn't mean at all, that the tax will have to be paid. The legislation provides for one more non-taxable amount throughout life - 11,4 million. dollars (as of 2019 year). Therefore, for donated, eg, 50 thousand. dollars you will need to fill out a declaration, but the excess in 35 thousand. dollars can be credited to the lifetime limit.

Tax minimization in the USA is possible only in the case of thorough knowledge of the legislation, as well as his law enforcement practice. That is why tax advice is widespread in America.. Do not neglect consulting a tax attorney, especially when planning to move to the United States or start a business in that country.

This article is for informational purposes only and is not a consultation on individual issues.. To implement specific solutions, we suggest contacting our experienced tax attorneys and CPA.

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