NEWNow you can listen to Pak Gazette articles!
If you live in one state and work in another, you must tell the IRS when it comes time to file your taxes.
If you work in more than one state, that’s also something you need to report to the IRS. And for professional athletes, competing on the road makes calculating income taxes very complicated.
“Carry, [for] For example, a professional baseball player. How many cities does that baseball player play in? Sometimes they will need to file a tax return in ten to fifteen states. So, it can be a bit onerous. For a first-time professional athlete, when you first get your check, it’s great and then you realize, ‘I have to pay taxes everywhere,'” says tax attorney and CPA Rich Hofmann.
Hofmann says professional athletes need to keep track of where they are when they are working. But, he says, for most professional athletes who work for an organization, the organization will follow up.
Hofmann also says that the way an athlete’s contract is structured could affect where their income tax is paid. “They may be able to structure some of his compensation as deferred compensation. There may be some things they can do in terms of signing bonuses and residency when that bonus happens. So, there are some really interesting things you can do, but, again, it really depends on the player and the facts and circumstances.”
Hofmann says professional athletes should hire an agent who knows what’s going on and has access to tax expertise.
