Income Tax Planning For Athletes
Strategies to minimize the taxes you pay to maximize the income you keep
Federal Tax Planning
- Ensure you capture all eligible deductions
- Fully fund all retirement options including 401k and SEP IRA
- Ensure proper income tax withholding to prevent large tax liability
State Income Tax Planning
- Ensure you have proper state residency
- Determine eligible deductions for all 1099 income
Proper Tax Filing Prep
- Identify all expenses that can properly be claimed
- Confirm all 1099 income from marketing/endorsement deals
- Ensure all gifts exceeding the annual gift limit are disclosed.
- Collect all tax documents including year end paystub, W2, duty days, 1099s
Once a professional athlete has signed a contract with the team, financial planning, income tax planning, budgeting and cash management are critical. The states that you play professionally have a significant impact on the taxes you pay and proper planning can ensure you receive every dollar that you deserve. We work hard with our clients to understand the expenses that are incurred for their professional sport and what is eligible to be deducted. While professional tennis players and golfers are considered businesses by the IRS, other professional athletes such as football and basketball players – who must employ agents, attorneys, trainers and more – do not get some of the same tax deductions as wage employees of their professional leagues. Special tax considerations also exist relating to marketing and licensing rights and sponsored endorsement deals. Understanding these tax considerations is critical to ensure you are able to deduct all eligible expenses against the income received off the field or court.
As your financial coach, TBH Sport’s goal is to educate you and simplify your financial life. We will offer the income tax planning you need to secure your financial future for years to come. Call us today for a no-obligation meeting to learn more about how TBH Sports can help you plan for your financial future.