Tags: tax law | pro athletes | tax deductions

Tax Law Eats Into Pro Athlete Paychecks

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By    |   Friday, 07 December 2018 11:45 AM

Professional athletes may lose tens or hundreds of thousands of dollars due to the alterations made to a tax law earlier this year, MarketWatch reports.

Individuals are no longer able to deduct more than $10,000 from their state and local taxs. They also cannot take itemized deductions for work expenses or investment fees. Players in the NBA, NFL, MLB and other major sports leagues were previously able to deduct thousands for various expenses, including agent fees and workout clothes, according to Grassi and Co. CPA Steve Goldstein, who has worked with several athletes.

“One of my players makes $2 million a year, and it will cost him $80,000 more now because he can’t deduct state taxes [over $10,000], agent fees, workout clothes, meals and entertainment, and his cellphone,” Goldstein told MarketWatch.

Tax rates depend on the state, with the highest in California at 13 percent, but tax can depend on where a game is played. A player that lives in Florida does not have to pay tax on income from home games, because Florida has no state income tax, but a player would have to pay income tax on money made from games played in New York. And for athletes who live in a different state from the one they play in, they have to prove that they were in the “domicile” state for at least 183 days out of the year.

“New York is aggressive with auditing when high earners try to claim residency somewhere else. I’ve had players go through it,” said CPA and Tax Director Sean Packard of OFS Wealth, which works with hundreds of athletes and celebrities.

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Professional athletes may lose tens or hundreds of thousands of dollars due to the alterations made to a tax law earlier this year, MarketWatch reports.
tax law, pro athletes, tax deductions
271
2018-45-07
Friday, 07 December 2018 11:45 AM
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