Author Topic: Amazing Raffle - AA covered trip  (Read 3105 times)

Offline Dan

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Re: Amazing Raffle - AA covered trip
« Reply #20 on: July 28, 2011, 10:57:23 AM »
The prize is not in a special category. It is part of your earned income for the year, which is reduced by above the line deductions. So someone with a wife a two kids isn't have a very high effective rate even with the winnings.
I'm still really not sure what your point is.  Those "for AGI" deductions are set flat rates.  They aren't going to reduce the prize winnings at all which will go straight to your highest marginal rate, if not higher than your highest marginal rate.  It's got nothing to do with your effective rate.

I'm no accountant though (but I did stay in a holiday inn express last night ;)), how about anyone else?
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Offline bosoxfan

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Re: Amazing Raffle - AA covered trip
« Reply #21 on: July 28, 2011, 11:19:26 AM »
I'm no accountant though (but I did stay in a holiday inn express last night ;)), how about anyone else?

I am.

Offline Dan

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Re: Amazing Raffle - AA covered trip
« Reply #22 on: July 28, 2011, 11:34:14 AM »
I am.
And you would advise your clients winning a prize to look at their effective tax rates rather than their marginal tax rates for what would happen if they had more income??
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Offline bosoxfan

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Re: Amazing Raffle - AA covered trip
« Reply #23 on: July 28, 2011, 11:42:09 AM »
I don't work in personal income tax, or tax at all for that matter.