Getbig Bodybuilding, Figure and Fitness Forums
Getbig Main Boards => Gossip & Opinions => Topic started by: CREALMADRID on October 10, 2012, 11:47:37 PM
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Can someone explain me this, i pic this chart from wikipedia : http://en.wikipedia.org/wiki/Internal_Revenue_Code
so does this mean that PHIL`s OLYMPIA check of 250k is 43% taxes-then he earns "only" 147,5 k cause he has to pay 107,5k taxes... i dont understand which is real income the numbers from the left or from the right:
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No that's an old code adjusted for inflation.
Here's what you need -
Heres a quick rundown of what the Federal income tax brackets are expected to look like in 2012:
Tax Bracket Married Filing Jointly Single
10% Bracket $0 $17,400 $0 $8,700
15% Bracket $17,400 $70,700 $8,700 $35,350
25% Bracket $70,700 $142,700 $35,350 $85,650
28% Bracket $142,700 $217,450 $85,650 $178,650
33% Bracket $217,450 $388,350 $178,650 $388,350
35% Bracket Over $388,350 Over $388,350
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I bet a lot of guys don't pay taxes.. Phil probably is smart though and does.
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No that's an old code adjusted for inflation.
Here's what you need -
Heres a quick rundown of what the Federal income tax brackets are expected to look like in 2012:
Tax Bracket Married Filing Jointly Single
10% Bracket $0 $17,400 $0 $8,700
15% Bracket $17,400 $70,700 $8,700 $35,350
25% Bracket $70,700 $142,700 $35,350 $85,650
28% Bracket $142,700 $217,450 $85,650 $178,650
33% Bracket $217,450 $388,350 $178,650 $388,350
35% Bracket Over $388,350 Over $388,350
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so for the olympia winner you pay 1/3 of your 250k...interesting
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I bet a lot of guys don't pay taxes.. Phil probably is smart though and does.
If they get cash to guest pose, why would they
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I doubt if it's 30 %.
He lives in USA and USA is not communistic. Right ?
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so for the olympia winner you pay 1/3 of your 250k...interesting
Easily that depending on right offs maybe more
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If they get cash to guest pose, why would they
I'm sure all guest pose cash,pictures he sells,and appearance cash goes unclaimed, I don't see how you could get around paying tax on contest checks though.
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All personal training cash goes right in the pocket to.
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I doubt if it's 30 %.
He lives in USA and USA is not communistic. Right ?
;D
That sort of money would pay taxes here, and its sad to think of all the effort and investment to actually win and then get up to 40% off...
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All personal training cash goes right in the pocket to.
I think the same-but for example when he collects all this money aside and put it in the bank or wherever...then he wants to buy a car or a new house,do the goverment see theres a difference what he earns and what he bought...in one or another way he has to launder his money
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he should just ask for a dump truck fill of GH
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USA tax rates are low.
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USA tax rates are low.
I am being raped up in Canada with taxes. Apparently what little money I make is equivalent more than what Phil is making in terms of paying taxes lol.
Arab countries have no taxes, the olympia prize should be handed out in like Kuwait or Qatar or sometihng haha...
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Aren't winnings from athletic events or other "shows" non-taxable or something like that? I also think that athletes can have certain expenses deducted (food, travel, etc) from taxable winnings too.
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If that were Phil's only income, and no deductions or credits, the tax would be about $64,000, after standard deduction and personal exemption.
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Tax rates in the US vary (between state income tax and federal income tax). With $250,000 in prize money, he will pay $36-39% in federal income tax, and whatever Colorado state income tax (6% or so). So yes, around 44% or so.
However, that is the INCOME generated for his business - Phil Heath Inc.
There are expenses associated with the business, deductions and much more. He will pay taxes on whatever is left at the end of the year.
Total income - expenses, etc.
I think the same-but for example when he collects all this money aside and put it in the bank or wherever...then he wants to buy a car or a new house, do the government see theres a difference what he earns and what he bought
His car (and only ONE car) is an expense, as is the food he buys, and anything that goes into preparation for his physique, which is associated with his winnings. It is the same as any other sport competitor, actor or any other self employed businessman. The rules apply no different.
For a house, if you have an office in the house, you can apply the amount of sq footage of the office in the house (aka, 10% or 15%) and apply those expense. If you pay $2,000 a month rent, and the office and workspace is 15% of the house, $300 of it goes for expenses, same with utilities, etc.
They are many rules, but that is why there are accountants and so much more. Each type of business is different.
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It's prize money, so if it were me, I'd ask that the check and the documentation from the IFBB do in fact show it as prize money.
If you want to call it business income, then you've just added self-employment tax (SSI & Medicare) to the equation, and you'll file Schedules C & SE. You'll need a lot of expenses to make that wash on $250,000.
Call it business income and add $20,000 of expenses for food supps, home office/gym, and you have about $71,000 tax bill, because I've added SE tax (54 regular + 17 SE).
You'd have to research it to see whether you have a choice in the matter.
Ron, you cannot take a deduction for "rent" because you cannot pay yourself rent unless you are operating out of a corp entity. And even if you did, you have to recognize that as income anyway on Sch E. So you save a little SE tax on the differnce.
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Tax rates in the US vary (between state income tax and federal income tax). With $250,000 in prize money, he will pay $36-39% in federal income tax, and whatever Colorado state income tax (6% or so). So yes, around 44% or so.
However, that is the INCOME generated for his business - Phil Heath Inc.
There are expenses associated with the business, deductions and much more. He will pay taxes on whatever is left at the end of the year.
Total income - expenses, etc.
His car (and only ONE car) is an expense, as is the food he buys, and anything that goes into preparation for his physique, which is associated with his winnings. It is the same as any other sport competitor, actor or any other self employed businessman. The rules apply no different.
For a house, if you have an office in the house, you can apply the amount of sq footage of the office in the house (aka, 10% or 15%) and apply those expense. If you pay $2,000 a month rent, and the office and workspace is 15% of the house, $300 of it goes for expenses, same with utilities, etc.
They are many rules, but that is why there are accountants and so much more. Each type of business is different.
OK lets see-he earned from O and SHERU 310k,lets say he have 250 k from MUSCLETECH and 250 from FLEX-thats 810k,lets say taxes are 40%,in the end he earns 486k...i know that he have many other sponsors but i wrote the basics...so he earn from selling pics online and on the expoes,guest posings etc...he can easily "wash" that money-cause he buy all quality food,goes to restaurants to eat(thats not cheap if you go year round),he goes to massages and chiropractic adjustments,he buy gas for the car,clothes,house expens...basicly he lives a high life and for that he can wash the money...but if he is going for example to buy a car or a big house they would see that something is wrong with his taxes...am curious how much he jay and other top ifbb makes...i heard ronnie said that he charges 7k for seminar and guest posing...
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Imagine paying 100 thousand in taxes *snap* just like that and then not even receiving basic health care without paying extra.
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I'm not sure about prize money, but I do know that we have a paedophile on the boards called 'garebear' who is avoiding serious allegations.
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Would be amazing if he was allowed to deduct ALL his food. Because all human beings need a min/amount of food to eat just to stay alive obviously. True Adonis should write to the IRS about this and if food is a deductible, maybe they would reconsider after reading his calorie is a calorie theory and that no special food is needed for hypertrophy.
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Mr. Olympia don't pay no fucking taxes
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Tax rates in the US vary (between state income tax and federal income tax). With $250,000 in prize money, he will pay $36-39% in federal income tax, and whatever Colorado state income tax (6% or so). So yes, around 44% or so.
However, that is the INCOME generated for his business - Phil Heath Inc.
There are expenses associated with the business, deductions and much more. He will pay taxes on whatever is left at the end of the year.
Total income - expenses, etc.
His car (and only ONE car) is an expense, as is the food he buys, and anything that goes into preparation for his physique, which is associated with his winnings. It is the same as any other sport competitor, actor or any other self employed businessman. The rules apply no different.
For a house, if you have an office in the house, you can apply the amount of sq footage of the office in the house (aka, 10% or 15%) and apply those expense. If you pay $2,000 a month rent, and the office and workspace is 15% of the house, $300 of it goes for expenses, same with utilities, etc.
They are many rules, but that is why there are accountants and so much more. Each type of business is different.
Can he write off his scripts?
I know to write off medical it usually has to be more than 10% of your income
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Presciption medicine is deductible to the extent the total of all medical expenses exceed 7.5% of your adjusted gross income. (Includes heath insurance, etc).
However, it looks like prize winnings for a professional athlete is subject to SE tax. That adds another 13% to the effective tax rate (you get to deduct 50% of the SE tax).
So, you may also deduct your health insurance as an adjustment for AGI.
Illegal drugs - not deductible.
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Your food bill is not 100% tax-deductible.
I am not an accountant, but trust me on this.
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How much of it would be? Say I am a personal trainer, and I use my body- my image, competition photos and results as a big part of my marketing, and I need certain amount/quality of food to maintain that level. How much, if any of that food bill is deductible?
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Tax rates in the US vary (between state income tax and federal income tax). With $250,000 in prize money, he will pay $36-39% in federal income tax, and whatever Colorado state income tax (6% or so). So yes, around 44% or so.
However, that is the INCOME generated for his business - Phil Heath Inc.
There are expenses associated with the business, deductions and much more. He will pay taxes on whatever is left at the end of the year.
Total income - expenses, etc.
His car (and only ONE car) is an expense, as is the food he buys, and anything that goes into preparation for his physique, which is associated with his winnings. It is the same as any other sport competitor, actor or any other self employed businessman. The rules apply no different.
For a house, if you have an office in the house, you can apply the amount of sq footage of the office in the house (aka, 10% or 15%) and apply those expense. If you pay $2,000 a month rent, and the office and workspace is 15% of the house, $300 of it goes for expenses, same with utilities, etc.
They are many rules, but that is why there are accountants and so much more. Each type of business is different.
I am an accountant in Australia so tax is law is going to be different in certain areas however in Australia, professional athletes are not able to claim deductions for food etc as this is seen to be something that would be bought regardless of profession. Although an athlete may require more of a certain type, this is still a big no no in Australia. There have been some very specific tax rulings in regards to athletes allowable deductions as many have tried to claim things in the past and it has been stopped. Also, any free supplements he receives from sponsorship's would also have to be shows as "income" the monetary value of those that is, and would be taxed. At least in Australia he would anyway. Also, those guest posing appearances, if he was smart he would declare. You don't think the promoter of the show would show his guest posing fee as an expense? It would be very easy to catch them out. Not saying it would happen but lets say he got audited, then it would not be missed. As the saying goes "the only certainties in life are death and taxes" If Phil is making good money though i am sure he has a good accountant and would be minimizing his tax in certain ways as much as legally possible...who wouldn't be
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Going crazy on your deductions only works until you get checked, and you fall on your face. Then you'll have some heavy penalties to pay.
Food you supply in your office for employees is fully deductible, such as coffee and snacks.
Business meals (meals with customers/clients/employees) where business is discussed are 50% deductible.
Meals while on business trips are 50% deductible.
Just because you're a b/b doesnt' make your chicken breasts deductible.
But maybe if you are spending $300/month on supps, that may be. I don't know.
The key is to not go overboard. Certain areas are checked more than others. Meals, travel and auto expense come under this category. Check out the IRS audit guides.
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These guys would get creamed in an audit.
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These guys would get creamed in an audit.
Creamed :D bodybuilding related
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I doubt if it's 30 %.
He lives in USA and USA is not communistic. Right ?
In the U.S. we pay taxes on our "taxable income" (your income after deductions). This means every penny a winning pro bodybuilder spends to earn that big prize money is deductible. Think of all the supplements and drugs. I suspect one might even be able to figure out a way to deduct all those chicken breasts too. If one's taxable income is actually $250,000 then they might pay 30% it in taxes. However, remember that Mitt Romney makes millions of dollars and managed to pull off a 14% tax rate.
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You compute your income tax based on TI (taxable income), not AGI (adj. gross income).
AGI less itemized ded/or std ded, and personal exemptions = TI
Then you add or subtract many things (AMT, credits, SE tax, etc).
Romney's tax is 14% because it is based primarily on qualified dividends and long-term capital gains, which are given a preference at 15% due to the Bush tax cuts passed in 2001. ("Carried interest" is huge loophole that should be closed that gets treated like LTCG's).
How many voters realize that Obama extended the Bush tax cuts for 2 additional years on 12/17/2010. The cuts were set to expire, but he'd rather complain about them. Romney has not done anything wrong in that connection.
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I am an accountant in Australia so tax is law is going to be different in certain areas however in Australia, professional athletes are not able to claim deductions for food etc as this is seen to be something that would be bought regardless of profession. Although an athlete may require more of a certain type, this is still a big no no in Australia. There have been some very specific tax rulings in regards to athletes allowable deductions as many have tried to claim things in the past and it has been stopped. Also, any free supplements he receives from sponsorship's would also have to be shows as "income" the monetary value of those that is, and would be taxed. At least in Australia he would anyway. Also, those guest posing appearances, if he was smart he would declare. You don't think the promoter of the show would show his guest posing fee as an expense? It would be very easy to catch them out. Not saying it would happen but lets say he got audited, then it would not be missed. As the saying goes "the only certainties in life are death and taxes" If Phil is making good money though i am sure he has a good accountant and would be minimizing his tax in certain ways as much as legally possible...who wouldn't be
i heard that sayin the only certanties in life are death and taxes-but only in USA in other countries i didnt heard this sayin...but lets get back on my post-you mentioned youre from australia,well i heard ronnie coleman a year ago on dave palmbo radio show,he said he is going on australia tour,and dave asked him how much he will earn and ronnie said 50k in 3 weeks-and then said that he can only bring 10k wiith him in the plane and the rest of the money he has to divide to few persons so they can deport it in the usa...i dont believe any of this athletes pay taxes or show the money of guest posings...i mean,guest posing is not a regular business,you think a promoter pay taxes when he gives phil 7k per guest posing?i dont think so,its a launder money cause phil cannot declare that money if promoter didnt declare it...and who is crazy to do it.if he gets lets say 5k per posing,the promoter has to pay 10% to the state,then phil gets 5k and he too has to pay 10% to the states...i dont think they are so dumb to gives this money to the state...
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i heard that sayin the only certanties in life are death and taxes-but only in USA in other countries i didnt heard this sayin...but lets get back on my post-you mentioned youre from australia,well i heard ronnie coleman a year ago on dave palmbo radio show,he said he is going on australia tour,and dave asked him how much he will earn and ronnie said 50k in 3 weeks-and then said that he can only bring 10k wiith him in the plane and the rest of the money he has to divide to few persons so they can deport it in the usa...i dont believe any of this athletes pay taxes or show the money of guest posings...i mean,guest posing is not a regular business,you think a promoter pay taxes when he gives phil 7k per guest posing?i dont think so,its a launder money cause phil cannot declare that money if promoter didnt declare it...and who is crazy to do it.if he gets lets say 5k per posing,the promoter has to pay 10% to the state,then phil gets 5k and he too has to pay 10% to the states...i dont think they are so dumb to gives this money to the state...
I don't think you understand. Why would a promoter pay tax on an expense i.e guest posing fee? The promoter is in the business of promoting bodybuilding shows, the fee he pays Phil would be a deductible expense. To Phil it is income, Phil pays the tax on this. The promoter will of course claim this as a deduction as it will REDUCE the amount of tax he pays as it reduces his taxable income. If Phil didn't declare this as income, in the event of an audit it would be very easy to see as a promoter would have made a deduction for it. I don't understand what the story of Ronnie Coleman has to do with any of this. Don't be ridiculous, if athletes earn money, they pay taxes. If they are good with money, they pay less taxes. Its not hard nor illegal to minimize the tax you pay.
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I don't think you understand. Why would a promoter pay tax on an expense i.e guest posing fee? The promoter is in the business of promoting bodybuilding shows, the fee he pays Phil would be a deductible expense. To Phil it is income, Phil pays the tax on this. The promoter will of course claim this as a deduction as it will REDUCE the amount of tax he pays as it reduces his taxable income. If Phil didn't declare this as income, in the event of an audit it would be very easy to see as a promoter would have made a deduction for it. I don't understand what the story of Ronnie Coleman has to do with any of this. Don't be ridiculous, if athletes earn money, they pay taxes. If they are good with money, they pay less taxes. Its not hard nor illegal to minimize the tax you pay.
phil jay etc who guest pose and recieve 5k atleast-they dont declare it...man the lifestyle they live they spend all year round guestposing money on-food,restaurants,gas etc...jay said he spends 20 k on massages a year,100k on food a year (maybe on buying food restaurants etc),imagine how much gas he spends if he goes in and out of gym 2 times a day for 10 miles one way,plus other ventures etc...their lifestyle costs...so lets say phil gets 5k per guest pose and he does that for 8 months a year(minus 4 months olympia prep) thats 160k-here we are only guessing...so he pays food,gas,restaurants massages,chiropractic...al this money you can launder...cause how can the state know how much gas i spent today
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Putting together a bodybuilding show is a great way to launder money. How is the taxman gonna know only 100 people turned up when you say 500 turned up? You pay tax on it but you can now buy legit assets.
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Plenty of gyms have dead people buying cash memberships also.
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phil jay etc who guest pose and recieve 5k atleast-they dont declare it...man the lifestyle they live they spend all year round guestposing money on-food,restaurants,gas etc...jay said he spends 20 k on massages a year,100k on food a year (maybe on buying food restaurants etc),imagine how much gas he spends if he goes in and out of gym 2 times a day for 10 miles one way,plus other ventures etc...their lifestyle costs...so lets say phil gets 5k per guest pose and he does that for 8 months a year(minus 4 months olympia prep) thats 160k-here we are only guessing...so he pays food,gas,restaurants massages,chiropractic...al this money you can launder...cause how can the state know how much gas i spent today
Perhaps i'm missing the point you are making but I don't think you understand how income tax works. Why would someone hide their expenses? the idea of minimizing the tax you pay is to show as many expenses as possible, to reduce your income = less tax. I would be VERY surprised if professional bodybuilders who did a lot of guest posing were not declaring the money they earn and paying tax on it. The tax department (IRS in the states i believe) are not stupid and this stuff is very easy to trace. Now i'm sure they will leave some out here and there, but the bulk of it would be declared. I'm not sure why you keep mentioning money laundering, the premise of money laundering is to integrate the proceeds of crime into legitimate income and hide its original source. What has this got to do with a bodybuilder not declaring his earnings and expenses? When someone Launders money, they declare it as legitimate income i.e. they pay tax on it. Do you not see, that the person paying the bodybuilder the guest posing fee would show this as an expense to reduce his income and pay LESS tax. If the bodybuilder then doesn't show this as income there is a gap = very easy to detect in an audit if there was one even if it was a cash payment. In Australia, major sporting competitions offering prize money are required to deduct tax at our highest tax rate on the winnings and remit it to the ATO, the "winner" is actually given a net amount, not the amount that is publicized. This is mainly to stop athletes from overseas not paying tax to the Australian taxation department as it would be pretty hard to chase them up after they leave. Now this is for major sporting competitions, i'm not sure if bodybuilding competitions would be caught under this rule, i'm sure Tony Doherty would know though.
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This is a good post, james. In the future, you ought to consider splitting posted content into paragraphs based on specific thoughts rather than spilling it all out into a wall of text.
Will keep that in mind
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Heywood, you seem to know your tax shit so I have a question for you.
If I got audited by the IRS and had nothing to hide / did nothing wrong, could I tell them to fuck off? And not supply them with any of their requested information? I mean the burden should be on them to prove guilt, not me to prove innocence.
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so for the olympia winner you pay 1/3 of your 250k...interesting
No, according to that chart only net earnings over $217,450 are taxed at 33%. The whole $250k isn't taxed at 33%, only the last $32,550, assuming no deductions.