By Teresa Ambord
It must be a pain to be wealthy and famous. Most people who enter a state on business can slip in, do a deal, and go on home without drawing the unwanted attention of the IRS or state tax agencies. But for Tom Hanks – or a host of other celebrities and professional athletes – it's not so easy. Their schedules and appearances, even mundane details like their haircuts or gym visits, are fodder for the nightly news and entertainment media.
But the public and media aren't the only ones watching. Revenue-hungry tax agencies – federal, state, and local – are watching too, waiting for an opportunity to fire up the old tax calculator and bring in some new tax bucks.
The Big Apple Wants a Bite
Tom Hanks is one of those bicoastal celebrities, with a primary residence in California and another home in New York City (NYC). According to Paul L. Caron, of the TaxProf Blog, Hanks can only spend 183 days a year in his NYC apartment without running afoul of the tax man.
Barely into October, Hanks had already racked up 149 days in the Big Apple earning money. This includes rehearsing for and appearing in the Broadway production of Lucky Guy. He's also been in NYC for the recent premier of his film Captain Phillips at the New York Film Festival. Before the end of the year, he must return to NYC for the opening of Captain Phillips on October 10, and again for Saving Mr. Banks in December. This means he'll have to ration the days he spends in NYC before the end of the year, and that's why he cut out early from the premier festivities surrounding Captain Phillips last week.
For Hanks, who loves to interact with fans and always works to support his films, this was uncharacteristic. Yet, by the end of his Captain Phillips screening on October 4, before the traditional bows, he was on his way home. The film's director took the bows for him. Hanks also missed the big party at the Harvard Club afterward.
Run, Forest, Run!
Again, this is a common problem for high-profile individuals. It's hard to hide the fact that you're earning income in other states when your schedule is widely publicized. Hanks probably pays a bundle in tax. Like the rest of us, he's well within his rights to minimize his tax liability with smart, legitimate tax strategies. But, as the TaxProf Blog points out, Hanks has been a vocal supporter of the "99 percent" who are angry at the ultra-wealthy for not paying even more tax.
When it comes to the stage and to a providing good entertainment, Hanks, alias Forest Gump, has proven to be one of the best and most respected actors. Unlike many celebrities and pro athletes who trust the wrong people, Hanks clearly has a financial advisor who is on top of the details. That's why when Hanks' time in NYC started waning, his accountant shouted, "Run, Forest, Run!" And run he did.