The IRS Takes Top Prize at the 2013 World Series of Poker Main Event
While Ryan Riess may have won the 2013 World Series of Poker Main Event, along with $8.3 million in prize money, he now faces the “problem” of having to pay taxes on life-changing money.
Russ Fox, E.A. of Taxable Talk took a look at the tax implication of each player from the final table and ultimately determined that the true winner of the Main Event, in terms of cash, was the Internal Revenue Service. Depending on a player’s specific tax situation, some US players paid as much as 46 percent of their winnings in taxes.
Main Event winner Ryan Riess doesn’t have to worry about state taxes since he lives in Nevada, but his occupation as professional gambler equals self-employment. Self-employed individuals not only pay federal tax, but also self-employment tax. Riess will owe a 42 percent tax rate, or about $3.47 million to the IRS.
Jay Farber’s classification as an amateur player will actually help him in regards to taxes. He will only have to fork over 39 percent of his $5.17 million prize, equal to $2.02 million. Third place finisher Amir Lehavot will have to give up $1.54 million in taxes to the IRS, leaving him with $2.1 million of his $3.7 million prize.
Sylvain Loosli may have seemed like he was just laddering up the pay ladder at the final table, but it appears he will have the last laugh when it comes to payouts. Since Loosli lives in the United Kingdom, he will not have to pay a dime in taxes.
The U.K. does not tax resident gamblers, even professionals. In addition, the United States is not required to withhold taxes from his winnings. As such, Loosli will take home the entire $2.79 million prize for fourth place. In reality, he will take home more money than third place finisher Amir Lehavot.
JC Tran took fifth in the Main Event and earned $2.1 million. Unfortunately, the fact that he lives in California resulted in his paying a total of 47.56 percent in taxes. He faces a 39.6 percent federal tax rate and a 13.3 percent marginal tax rate for the state of California. After taxes, he will take home just over $1.1 million.
Marc-Etienne McLaughlin’s day ended in a dramatic bustout on Monday when he ran pocket kings into aces. His bad beat did not stop there. U.S. tax withholding requires that 30 percent be taken off the top before he is even cut a check. This means that $480,307 was taken out of the $1.6 million prize before he was even paid. Once he finally pays taxes, he will face a 50 percent marginal tax on his winnings. While he will receive credit for the 30 percent already paid to the U.S., McLaughlin will still have to shell out $792,935 in total for taxes.
Michiel Brummelhuis may have finished in seventh, but he will take home more money than McLaughlin did for eighth. Brummelhuis is from Amsterdam and the Netherlands charges just a flat tax rate of 29 percent for its gamblers. This means he will pay out $355,353 in taxes, leaving him with $870,003 of his $1.22 million prize.
David Benefield may be a professional student, but his living in New York will result in his paying nearly the same as if he were a pro gambler. Between federal taxes and state taxes, he will owe a tax rate of 46 percent and will shell out $437,201 of his $944,650 prize for eighth.
Finally, Mark Newhouse did not receive any additional prize money at the November Nine final table as he finished in ninth. He was paid $733,224 back in July and will owe 44 percent of that in taxes. He will clear $410,345.
In total, over $9.64 million will be paid out in taxes from the November Nine final table. The U.S. will receive the majority at $8.62 million. With the top prize of the WSOP Main Event at $8.3 million, the real winner of the 2013 WSOP Main Event was the Internal Revenue Service.
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