NFL Players versus the IRS: It's a Tough Tackle


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Professional athletes get a lot of glory, not to mention salaries that range from healthy to obscene, and all for doing what they love. It's one thing to envy their wealth, but when it comes time to file taxes, be glad you're not one of them.

Pro athletes are the guys who put the gleam in the eyes of tax authorities everywhere. Unlike a business person who can slip unnoticed into a state, do a deal, and slip out again, the athlete's work schedule is on the nightly news. You can bet when the NFL comes to town, the local taxmen hear the cha-ching of new tax revenue. 

Thanks to the jock tax, an NFL player can easily file a bumper crop of tax returns before he's through. The average salary of NFL players this year is close to $2 million. With thirty-two teams and up to fifty-three players (on game day), the taxable income adds up pretty quickly.

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Though I found your article very informative it is also biased towards the tax paying player. You failed to mention that many of the stadiums used by the players to earn their salaries are funded and maintained by the taxpayers of the cities where they play.

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Such bias is not the point. The PLAYER looks at what he makes net in each state. It's a factor considered when deciding where he plays (certainly not the ONLY factor). Almost ALL stadiums are subsidized (something I adamantly oppose), but that doesn't affect the players' signing decision. The dramatic disparity in tax rates is what fans in high tax states should be concerned about, but aren't not (yet) -- at least in crazy California.

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what about signing bonuses?........jock tax cash basis? what if you sign your contract at the beginning of the year before you even play or practice and you receive bonus (all upfront $cash$) and you're a Florida resident......does that mean you have to allocate the bonus over games played even when paid prior to performance?......

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If you sign a contract in the begging of the year you won,t get w2 forms till the following year same as any other person

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NBA, NHL, and MLB players have to factor in filing in both Canada and the US, too.

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What is particularly important is which state is one's official tax residence. Tricky business.

IF a CA pro athlete legally resides in California, they owe the CA 13.3% tax on ALL income over a million dollars - REGARDLESS where the games are played. Plus they owe that onerous tax on all ENDORSEMENT income, plus investment income (capital gains is taxed as OI in California).

Yes, they get credits for paying taxes in other states, but they owe a net 13.3% state tax on essentially all their income, net of credits/deductions.

Moreover, as I understand it, new federal tax laws disallow about 22% of the deductibility of state income tax paid if you have an AGI above $2,000,000 for the year.

I expect a stately decline in the quality of California's pro sports teams in coming years, as highly talented free agents will be quite reluctant to move to the misnamed Golden State. The small market teams will be especially hard hit -- San Diego Chargers and Padres, Sacramento Kings, perhaps the Oakland teams.

Indeed, I would not be surprised to see the Chargers move to another state. The Sacramento Kings already came close to being sold to owners in tax-free Washington state.

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