So you won a seat to the 38th annual World Series of Poker, the main event. A $10k price tag with the potential to win a million dollars many times over. To make it better, the online poker room you won the prize package from is going to fly you to Las Vegas and give you spending money and pay for your room. Can't see any reason to pass that up, can you? Well, you may not have thought of this one, but it is very real, and is causing some winners to say "no thanks." The reason? Taxes.
When you win a prize with a cash value, you owe taxes, pure and simple. When you get a prize package worth $12,000 (with all the extras) you owe taxes on $12,000. If your annual income is around $30,000, you will suddenly have to pay taxes on $42,000, and you have no guarantee that you will actually MAKE money at the WSOP. That is a pretty big jump which can turn your windfall into a problem.
The good news is that this year the WSOP is paying things out a little more in favor of those just breaking the bubble. With the big prizes at the end reduced a bit and that money spread around among the other finishing places, if you did place you would be able to handle your taxes no problem.
If you do happen to be a recipient of a $10k gift from an online poker room that allows US players, you have an out. You don't have to spend the money on the WSOP main event, which means you can use it on pretty much whatever you like - which in that case is just like a ten grand jump in your income, so the taxes make sense.
Today, June 27th, the only event starting is Event 44 - Omaha High-Low 8/OB $2,000.
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