First the Super Bowl, and now the XXII Winter Olympics, and not long after the games are over, IRS deadlines for taxes! Many professional athletes will feel the pressure of taxes come April, so if you are one of them, pay attention.
Just like regular taxpayers, professional athletes are subject to steep fines and penalties for incorrectly filing taxes. What is the difference between professional athletes and everyone else? Generally, professional ball players, motorsports athletes and Olympians fall into wealth rapidly, and their careers are brief, often lasting less than a decade. Professional athletes are some of the wealthiest taxpayers in the United States, and many famous athletes will earn an annual income of more than $1 million.
If you are a professional athlete, it is important to have a tax deduction plan in place. Finding a professional tax resolution lawyer that understands the tax system, and the financial tax requirements of an athlete is paramount. At U.S. Tax Shield, the tax resolution specialists know which expenses are tax deductible.
When meeting with a tax professional, make sure to inquire about the following circumstances:
- League and Organization Dues- Make sure you ask you tax professional about paying league and organization dues and deducting this payment in your taxes.
- Fines- If you have ever been fined by your league, ask if the fine is contributed to a charitable organization. If so, you can deduct the fine you paid from your taxes.
- Equipment- If you have spent money on skis, goggles, tennis balls, baseball bats, helmets, etc., the IRS considers this a career requirement and you are allowed to deduct these expenses, so keep all receipts.
- Travel- If you pay for flights, hotels, or meals out while on the road, this is considered tax deductible.
- Rent for Housing- Rent paid on a house or apartment while training under a contract is also deductible.
- Sports Agent Fees- Agents help an athlete find work and get paid for appearances. Agent fees can be deducted.
- Sport Massages- Any medical injuries that have required rehab through physical therapy or healing massage can save you money on your tax bill come April.
- State of Residency- If you claim residency on a state that taxes less, it could save you money.
- Workout Gear- Any equipment or gear purchased to promote athleticism is a tax-deductible expense.
If you are a professional athlete, knowing what questions to ask your tax specialist could save you hundreds of thousands of dollars. It is important to remember to keep all receipts and correctly keep track of all expenses.
Those who have not yet filed their taxes should contact a tax lawyer today. The professionals at U.S. Tax Shield have the industry knowledge to save you money. If you or someone you know owes back taxes, call us immediately. Our tax resolution lawyers help taxpayers negotiate the lowest legal settlement allowed by making a tax resolution plan that is tailored to their specific needs and situation.