MLB Update: What a Difference a Day Makes Tax Wise

By Teresa Ambord

 
At least one Major League Baseball player has succeeded in getting his next contract signed, sealed, and the ink dried before the 2013 tax hikes kick in. B. J. Upton just signed a five-year, $75.25 million contract with the Atlanta Braves.
 
His contract includes a $3 million signing bonus to be paid no later than December 31, 2012. Front-loading his deal and beating the tax increases that are likely to hit on January 1, 2013, should save Upton at least $120,000. Some sources put his savings at closer to $167,000.
 
Red Sox first baseman Mike Napoli and his agent, Brian Grieper, are currently eyeballing his $39 million offer from the Red Sox, also hoping to trim the tax bite. Grieper told reporters "We always take taxes into consideration when it comes to negotiating contracts. Any good agent is doing the same."
 

There's more on AWEB!

Do you have colleagues or clients who might like to receive the free AccountingWEB newsletter?
• Practice
• Education
• Tax
• A&A
• Technology
• Wealth Management

But Red Sox General Manager Ben Cherington downplayed the influence of the tax hikes in contract negotiations. "I don't think it [the fiscal cliff] has affected anything we've done. But that has come up in conversations, the uncertainty around that." 

 
And Tampa Bay Rays third baseman Evan Longoria took a pay cut in his $100 million, six-year contract extension in order to receive a $1 million bonus by December 15. Longoria's agent, Paul Cohen, said the move wasn't a response to the fiscal cliff specifically, but it just makes sense to take advantage of the lower 2012 rates. 
 
Highly paid athletes aren't the only ones trying to duck before the tax ax swings. Boston.com reports that more than 100 public companies have announced they plan to pay special dividends this quarter in advance of the surge in tax rates on dividends that's possible for 2013. 
 
Related articles:
 

You may like these other stories...

Hertz withdraws full-year forecast, cites accounting review, challengesRental car company Hertz Global Holdings Inc. said on Tuesday it is withdrawing its full-year financial forecast and expects 2014 results to be “...
Treasury prepares options to address tax inversionsDamian Paletta of the Wall Street Journal reported on Monday that US Treasury Department officials are assembling a list of administrative options for Treasury Secretary...
Deloitte CEO Joe Echevarria to retire to pursue public serviceMichael Rapoport of the Wall Street Journal reported that Deloitte LLP CEO Joe Echevarria plans to retire later this month to pursue his interest in public...

Already a member? log in here.

Upcoming CPE Webinars

Aug 21
Meet budgets and client expectations using project management skills geared toward the unique challenges faced by CPAs. Kristen Rampe will share how knowing the keys to structuring and executing a successful project can make the difference between success and repeated failures.
Aug 26
This webcast will include discussions of recently issued, commonly-applicable Accounting Standards Updates for non-public, non-governmental entities.
Aug 28
Excel spreadsheets are often akin to the American Wild West, where users can input anything they want into any worksheet cell. Excel's Data Validation feature allows you to restrict user inputs to selected choices, but there are many nuances to the feature that often trip users up.
Sep 9
In this session we'll discuss the types of technologies and their uses in a small accounting firm office.