Taxes & Professional Athletes
What it’s Like to Be an Athlete Through the Eyes of an Accountant
It’s that time of year again. Jerseys are out, fantasy drafts are coming together, and the grill is ready. Football season is always a good one. Your accountants in Rochester, NY are big fans of the nearby Buffalo Bills and excited for the season to begin.
If you want to explore an exciting tax account, try and follow an NFL player. Football players not only pay taxes where they live, but they also pay taxes in the states where they play and practice. Game in San Francisco? Training camp in Phoenix? Living in New Jersey? It gets complicated pretty fast.
But why pay attention to these details? As it turns out, taxes on football players is an important source of revenue for lots of states. For example, in California and Minnesota, there are jobs that are designed to specifically follow the schedule of sports leagues like the NFL and the MLB to calculate revenue.
This plays a role in a team’s scheduling as well. As explained in a Sports Illustrated article, the Cowboys spent close to an extra $10,000 per day by having their training camp in California rather than Texas.
These kinds of regulations vary from state to state and from sport to sport. For example, in Arizona, they typically tax professional athletes based off of the numbers of days worked in their state compared to the number of days they worked over the course of the year. Yet, there is an exception in the Copper state. They do not apply this strategy for pre-season. As a result, it is one of the MLB’s most popular spring training destinations. For example, the 2018 Cactus League included the following teams from across the nation:
- Arizona Diamondbacks
- Chicago Cubs
- Chicago White Sox
- Cincinnati Reds
- Cleveland Indians
- Colorado Rockies
- Kansas City Royals
- Los Angeles Angels
- Los Angeles Dodgers
- Milwaukee Brewers
- Oakland Athletics
- San Diego Padres
- San Francisco Giants
- Seattle Mariners
- Texas Rangers
All in all, looking into the taxes for athletes and sports teams is an interesting peek into our tax system. With complicated deductions and rules, it makes it quite difficult for the players. Check out Forbes’ Income Taxes For Pro Athletes Are Reminder Of How Complicated U.S. Tax Code Is for a more detailed look into professional athletes’ taxes like the top payed athlete in the United States, Lebron James.
Whether your taxes are complicated like the pros, or you need basic help, the Davie Kaplan team is here to help. Contact us for the answers to your questions or visit our services page for more information here!