Thursday, February 22, 2018

Eagles win Super Bowl, lose to taxman

The Philadelphia Eagles Won the Super Bowl, but They'll Lose on Tax Day - Hit & Run : - Eric Boehm:

February 5, 2018 - "The Philadelphia Eagles won the Super Bowl when they defeated the New England Patriots.... But it's the tax man who really always wins.

"Because the game was played in Minneapolis, the $112,000 bonuses paid to each player on the winning team (and the $56,000 bonuses paid to the losers), will be taxable in Minnesota, which has some of the highest personal income tax rates in the country. Each member of the Eagles will end up paying about $7,200 of their Super Bowl bonus to the state of Minnesota. That comes on top of an estimated $23,500 federal tax hit for each of the winning player's shares....

"Minnesota also imposes a so-called 'jock tax' on athletes that visit the state for practices and games. Income earned during the days leading up to Sunday's big game will be taxed at the state's top marginal rate of 9.85 percent. Only California has a higher jock tax, and even states with no personal income taxes — like Texas and Florida, both frequent Super Bowl hosts — still hit up professional athletes, coaches, and team staff with special taxes.

"Robert Raiola, chief of the sports and entertainment group at PKF O'Connor Davies, a New York–based accounting firm that specializes in working with athletes, tells that most players on the two teams would have spent about a week in Minnesota during the lead-up to the Super Bowl. That works out to about 3 percent of their total working time for the year, and their tax bills will vary... Tom Brady, who earned about $15 million in salary this year, could end up owing Minnesota roughly $43,000.

"[T]he average NFL player makes $1.9 million — considerably less than the average in America's other major sports. Still, that works out to more than $3,300 in state taxes owed simply for spending a week in Minnesota. And of course those players still owe taxes in Massachusetts and Pennsylvania, along with every other state where they played a road game during the season. Tennessee is the only state without a jock tax."

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