Win Damon of WNBP.com and Radio 1450 in Newburyport and Stu review the taxation of Professional Athletes as well as the taxation of the medals won by the amateurs at the Olympics.
Imagine the pro athlete who works in various cities and even countries during his season. This person would need to file as a non-resident in all the states in which he worked as long as he earned more than the minimum required in each state. He also may live in a different home state than he works. He would have to pay capital gains and income tax to his home state on any endorsement income earned. It gets very complicated and a qualified advisor needs to know his stuff to get these reports filed in a timely and effective manner!
An Olympic gold medalist also has to pay taxes on $25,000 of earnings. To some this seems unfair that we should be taxing success. But I see it as the price of fame! The “dues” or the “tax” or the “fee” for being an American and living in this great country. Besides, I am sure the athletes have many deductible business expenses that are needed to earn the money in the first place! Let’s hope they have a thorough accountant to help them plan when they land back on American Soil!
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With more than 23 years of experience as a credentialed tax professional, Stu Steinberg, CPA, MBA brings a broad depth of knowledge to his work. He has worked with small business entrepreneurs for many years helping them plan their businesses more effectively. He can be reached at stu@erocktax.com or (781) 247-5569 anytime.