# Income Tax on Having Your Income Tax Paid for You **URL:** \ **Category:** Factual Questions\ **Created:** [December 17, 2004, 10:21pm UTC](https://boards.straightdope.com/t/income-tax-on-having-your-income-tax-paid-for-you/280428 "2004-12-17T22:21:26Z")\ **Posts on this page:** 4\ **Page:** 1
**Author:** ![HeyHomie](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/heyhomie/32/207_2.png) [@HeyHomie](https://boards.straightdope.com/u/HeyHomie)\ **Post date:** [December 17, 2004, 10:21pm UTC](https://boards.straightdope.com/t/income-tax-on-having-your-income-tax-paid-for-you/280428/1 "2004-12-17T22:21:26Z")
Let’s say I’m in the audience on Oprah and she gives us each about $8,000 worth of goodies. That’s $8,000 worth of income on which we have to pay taxes. So Oprah kicks in another $2,500 to pay the income tax. But that $2,500 is income as well, isn’t it? So Oprah kicks in $600 to pay the tax on that. But that $600 is also taxable as well, no? So Oprah kicks in another $140 so pay that. But that $140 is also taxable income… My question is: could this theoretically continue until we get into pennies? Or do you not have to pay income tax on the income when the income tax is paid for you? ---
**Author:** ![iamthewalrus\_3](https://avatars.discourse-cdn.com/v4/letter/i/258eb7/32.png) [@iamthewalrus\_3](https://boards.straightdope.com/u/iamthewalrus_3)\ **Post date:** [December 17, 2004, 10:26pm UTC](https://boards.straightdope.com/t/income-tax-on-having-your-income-tax-paid-for-you/280428/2 "2004-12-17T22:26:51Z")
Tax forms usually only consider whole dollar amounts, so it will reach a stopping point. The way to calculate it is much simpler than the “keep adding the tax” method you’re using, though. If you want someone to end up with $x, with r being the tax rate, you just give them $y = $x/(1 - r). ---
**Author:** ![Diddly](https://avatars.discourse-cdn.com/v4/letter/d/e19b73/32.png) [@Diddly](https://boards.straightdope.com/u/Diddly)\ **Post date:** [December 17, 2004, 10:26pm UTC](https://boards.straightdope.com/t/income-tax-on-having-your-income-tax-paid-for-you/280428/3 "2004-12-17T22:26:53Z")
They could just assume you will be paying 28% income tax on that gift, and thus give you $9756.10 8000 \* (1 / (1 - 0.28)) ---
**Author:** ![Cliffy](https://avatars.discourse-cdn.com/v4/letter/c/59ef9b/32.png) [@Cliffy](https://boards.straightdope.com/u/Cliffy)\ **Post date:** [December 17, 2004, 10:50pm UTC](https://boards.straightdope.com/t/income-tax-on-having-your-income-tax-paid-for-you/280428/4 "2004-12-17T22:50:26Z")
It’s called “grossing up” (because you raise the gross payment so achieve the net payment you want). –Cliffy