Professional soccer may be lucrative for players and the clubs they play for. Professional soccer players may use their success to garner popularity on social media, which may get the attention of sponsors and allow them to monetize their popularity. On average, the five highest-paid professional soccer players make $75 million a year and traditionally require well-executed professional soccer athlete tax planning.
How Do Pro Soccer Players Overcome Tax Planning Challenges?
Federal tax filing for soccer players may be challenging because different sections of the tax code apply to the unique and varied ways athletes earn money. As a soccer player, your CPA may need to account for wage income, endorsement income, royalty income, and different investments they have. Your accountant may also have to set up legal structures to address each one of these issues.
State tax should be considered in soccer player bookkeeping and will vary depending on the home state of the player and the team that is employing them. If you are a player who is employed by a team in a particular jurisdiction you may have to pay taxes in that jurisdiction if there is a state’s tax there.
You or your CPA may need to take into consideration the location of individual games during the season and preseason training camp because most soccer players may train in a state outside of their home state of residence. Some individual cities have an income tax. Additionally, players may have away games in over 20 jurisdictions during the year. Their soccer player bookkeeping for that year could include 20 or more different tax returns. If you relate to this example, our team of professional athlete accountants recommends partnering with an expert to help you file and report accurately.
How Changes to the Tax Code Affect Soccer Players
Tax laws that impact soccer player bookkeeping went into effect 2018. Because of these changes, employee business expenses, such as a professional soccer player's training or fitness regimen, were removed from the tax code, so many expenses are no longer deductible.
You or your CPA should be knowledgeable about state law because some states still allow these deductions. If a soccer player went to a training camp that was necessary to improve their skills or improve their chances of making a team, some states may allow them to deduct it in the same way other professionals would deduct continuing education. On a positive note, changes to the tax law in 2018 lowered the top tax rate by almost three percent.
For athletes new to the professional arena, it may also be helpful to note that when professional soccer player is playing their first year, their salary may be lower than what they will earn as their skills improve. Tax mistakes made at this early stage may not be tragic. As their salary increases, though, mistakes can be devastating. Fusion CPA has a team of soccer player accountants experienced in helping professional soccer players take full advantage of all tax credits and deductions available to them.
Financial Advisers May Help You Avoid Disaster
Here at Fusion CPA, we understand the unique challenges that soccer players face, especially in handling state tax returns outside their own state. We have seen the disasters that happen when professional athletes have their taxes done by individuals who don’t understand international taxation or sports entertainment taxes. Part of our services includes helping our clients file amended tax returns to get money back because they missed opportunities.
It is common for professional soccer players have complicated tax returns. For this reason, our team of experienced professional athlete accountants is dedicated to helping you with your bookkeeping, tax planning, financial planning, and routine accounting. Our goal is to be partners you can trust to help simplify your financial situation so you can focus on your passion. You can learn more about our services by clicking the button below to schedule a complimentary discovery call today!
This blog article is not intended to be the rendering of legal, accounting, tax advice, or other professional services. Articles are based on current or proposed tax rules at the time they are written, and older posts are not updated for tax rule changes. We expressly disclaim all liability in regard to actions taken or not taken based on the contents of this blog as well as the use or interpretation of this information. Information provided on this website is not all-inclusive and such information should not be relied upon as being all-inclusive.