If you find yourself rushing to the post office at any point during the day to slap a stamp on the federal and state tax forms (unless you happen to live in Florida or another state with no state income tax) after a tax season likely filled with agony and trying to find every exemption possible, just make sure to look at it this way: at least you’re not a pro athlete.
Seriously. The Sacramento Bee talks to Kings players Anthony Johnson and Mikki Moore about what it’s like to have to pay taxes in states that charge visiting jocks to fill state coffers, but all of it damn near requires you have an accountant at the ready when those W-2s come in at the beginning of the year.
Professional athletes are required to pay income taxes in every state and city that levies them where they earned a salary during away games. That means Kings and River Cats players must file tax returns in dozens of states and several cities. In some jurisdictions, that includes practices, as well.
Each state determines taxable service performed, also known a “duty day.” The nonresident income tax, which is dubbed the “jock tax,” surfaced in the 1990s as a way for states to tap into the soaring paychecks of visiting professional athletes, said Ryan Losi, the executive vice president of Piascik & Associates, an accounting and financial services firm in Virginia that works with professional athletes.
Losi said many believe “jock tax” enforcement began when California taxed Michael Jordan when the Chicago Bulls beat the Los Angeles Lakers in the 1991 NBA Finals.
Today, taxes generated in California from visiting athletes bring in an estimated $100 million each year, according to the state tax board. Though entertainers and corporate executives who travel extensively are subject to the same tax, athletes tend to bare [sic] the brunt of it nationally, Losi said.
And I was scared shitless at the prospect of how I was going to afford the taxes on undeclared income. Sheesh. Yeah, yeah, I know sympathy is low for anyone who’s pulling an average of a million a year, but I’m surprised most pro athletes see any cash with where most of it has to go…and these taxes apparently also apply to minor leaguers in applicable sports, who really don’t have a heck of a lot of a pot to piss in unless they got a massive signing bonus.
No wonder the feds can get you on taxes if they’re trying to nab your ass for something else (i.e. Barry Bonds, Pete Rose.) There’s too many damn forms to make sure your accountant is preparing properly. Happy Federally Endorsed Racketeering Day!
(No, I’m not anti-taxes. I’m just wondering how I got less of a return back this year even though I think I actually made less money, but the math made sense and someone else did it. At least my return checks are either here or on their way.)