The only two things in life that are certain, as they saying goes, are death and taxes. The problem is, taxes have become quite complex, especially for professional athletes who travel to certain cities, states, and even foreign countries for the purpose of business.

In the case of professional athletes, the business is the sport in question. The Miami Dolphins travel for at least eight games in a typical season and one game was played in London, England against the Raiders. The Miami Heat play more often and travel to other states more frequently during their seasons and have the added burden of traveling to Canada for several games during their season too.  And the Miami Marlins and Miami Panthers travel to Canada as well.

What this all means for taxes, is that it’s really complicated! Here’s why.

State and City Taxes

Many cities, especially those hosting facilities that bring in professional sports games, have adopted special city taxes to impose on professional athletes in order to help offset the costs of their sports facilities. It’s an ingenious method, on behalf of the cities, to bring in tax revenue, without involving their constituents.

State income taxes are a given in most states, and is something players are expected to pay in every state in which they play in a given year and for every game they play in each state.

Complicated Formulas

Face it, few athletes are mathematical geniuses. They may have more than a little skill when it comes to reciting states, but complicated accounting formulas are often a little outside their wheelhouses. They have better things to do with their brain power, after all, like devoting themselves to improving their games.

Unfortunately, the formulas are so complex that only an accountant could possibly love them, oh and city and state bean counters who can’t wait from the dollars to roll on in from the 53 players on the rosters of at least eight different NFL teams each year.  If the Dolphins host a playoff game or a Super Bowl, then even more rolls into the local economy.

Don’t forget the tax revenue for trainers, coaches, equipment managers, officials, and more that travel with these teams as they take their games on the road. Other sports have even more games in other cities throughout the season raising the stakes even higher for host cities and states.

Mitigating the Costs of Doing Business Across State Lines

There are things players can do to help relieve some of their excessive tax burdens, otherwise known as the “jock tax.” They aren’t big bold moves, but they can save a great deal of money in taxes each year for players that take advantage of them.

Establish Permanent Residence in States that do not Tax Income

This will not eliminate all your tax burden, but it will go a long way towards relieving some of the burden to give athletes extra breathing room. Popular states for consideration are Florida, Texas, Nevada, and Wyoming.

Take Advantage of Available Deductions

They exist to help relieve tax burdens. Use them for that purpose. This is especially true of expenses related to training camp, like the following:

  • Hotels
  • Apartments
  • Meals
  • Rental Cars

Tax rules and exceptions get trickier by the year. Tax professionals like the CPA’s at Canner Brody and Yan are trained to deal with tricky situations.  Our firm has been trusted locally for over 65 years.  Call us at 305-231-2150 to learn how we can help minimize your tax consequences.