Taxes Push Income of NFL #1 Draft Pick to Second Place

By Teresa Ambord
 
As of July 26, the top three NFL draft picks have signed their contracts. As predicted, the numbers came in with only a slight variation from 2012. 
 
Here's a recap, with tax figures provided by Robert Raiola, CPA, @SportsTaxMan. Raiola heads the Sports & Entertainment Group for the New Jersey-based accounting firm of Fazio, Mannuzza, Roche, Tankel, LaPilusa, LLC.
 
Number one pick, offensive tackle Eric Fisher, will be playing for the Kansas City Chiefs. Assuming he's a Missouri resident, he'll pay state income tax of 6 percent, plus Kansas City local tax of 1 percent. As number one, he'll get a signing bonus of $719,200 more than the number two pick. But state taxes will claim roughly $894,000 in his first year. Combining federal, state, and city taxes, he'll net about $8.1 million. 
 
Number two pick, offensive tackle Luke Joeckel, will play for the Jacksonville Jaguars in Florida. Florida, of course, has no state tax, so assuming Joeckel is or becomes a Florida resident, he'll pay zero state tax on his income, which is somewhat smaller than Fisher's. He'll pay "jock tax" on some of the road games. Even so, this leaves him with net income of $8.4 million, or about $284,000 more than Fisher (for the first year of the contract, 2013). 
 
The number three pick is Dion Jordan, a defensive end who signed with the Miami Dolphins. He was also being courted by the Oakland Raiders. Had he gone to the California team and become a California resident, his income would've been subject to the highest state income tax in the country, at 13.3 percent. But as a Dolphin, and assuming he becomes a Florida resident, he'll pay some jock tax, but his net income will be spared a major hit compared to paying California's high rates. 
 
Related article:
 

You may like these other stories...

IRS must take oath on Lerner emails: judgeMackenzie Weinger of Politico reported on Thursday that a federal judge ordered the IRS to explain under oath how it lost emails connected to Lois Lerner, the ex-IRS official at the...
The Republican-controlled House of Representatives passed a bill on Friday morning that would permanently extend the bonus depreciation tax break for businesses.The measure, HR 4718, which was crafted by Representative Pat...
The Republican-led House of Representatives is expected to pass a bill this week that would permanently extend the bonus depreciation tax break. But don’t expect President Obama to sign it.The Obama administration said...

Upcoming CPE Webinars

Jul 16
Hand off work to others with finesse and success. Kristen Rampe, CPA will share how to ensure delegated work is properly handled from start to finish in this content-rich one hour webinar.
Jul 17
This webcast will cover the preparation of the statement of cash flows and focus on accounting and disclosure policies for other important issues described below.
Jul 23
We can’t deny a great divide exists between the expectations and workplace needs of Baby Boomers and Millennials. To create thriving organizational performance, we need to shift the way in which we groom future leaders.
Jul 24
In this presentation Excel expert David Ringstrom, CPA revisits the Excel feature you should be using, but probably aren't. The Table feature offers the ability to both boost the integrity of your spreadsheets, but reduce maintenance as well.