Why pro athletes may lose a fortune because of the new tax law

[Peter1469]

If we went to the Fairtax (sales tax) the poor could buy used and avoid much of taxes.

[MisterVeritis]

It is not a tax cut for the rich. What is higher? Sales tax on a Cadillac or sales tax on a Hundai?

Actually, the only truly fair tax is one in which everyone pays the exact same amount. That way the rich man’s money speaks no louder than the poor man’s money.

So, a head tax, then?

[donttread]

Because of changes to the tax law that went into effect this year, professional athletes might need to put their CPAs on speed dial.

That’s because players in sports leagues like the NBA, NFL, MLB, WNBA and NHL have traditionally been able to deduct tens or hundreds of thousands of dollars for things that they no longer can.


“One of my players makes $2 million a year, and it will cost him $80,000 more now because he can’t deduct state taxes [over $10,000], agent fees, workout clothes, meals and entertainment, and his cellphone,” says Steven Goldstein, a CPA with Grassi and Co. in New York who works with over a dozen professional athletes and celebrities.


And players who make tens of millions of dollars a year will potentially pay hundreds of thousands more a year in taxes.


The reason athletes are taking this hit is because individuals can no longer deduct more than $10,000 for state and local taxes (SALT) or declare miscellaneous itemized deductions for work-related expenses and investment fees. And these changes, especially the latter, will cost pro athletes more than most people.


Of course, the median household income in the U.S. is about $63,000, so why should most people care about these tax hits that still leave the majority of pro athletes incredibly well paid? In reality, not all of them make millions of dollars a year. As Goldstein points out, a third of NFL players make the league minimum, which this year is $480,000, and the average NFL career is only about three years. Plus many pros are in the minor leagues, where they can make less than minimum wage. But admittedly the tax hits mentioned in this article are largely an issue for “the 1%.”


https://www.marketwatch.com/story/wh...law-2018-12-06

Of the listed items I'm betting it's the agent fees that are the biggie.