Tax season (round one) just came to a close, but before you start complaining about how little you got back or how much you had to pay, consider the stressful lives of the rich and famous.
For pro athletes, just like anyone else, how much you pay in taxes depends on how much you make. However, the average sum paid by the top players is $1 million apiece in taxes every year. Fields of Green, a project of USA Today, undertook the daunting task of figuring out just how much the likes of Tiger Woods pay each year.
Check out the totals
According to the Fields of Green report, members of the NBA, MLB, and NFL pay, altogether, about $3 billion in taxes each year, if their 2013 returns are to be believed.
For comparison, consider that the IRS took in $2.5 trillion in total income taxes for 2013. It’s estimated that total salaries for pro athletes are around $9 billion.
Of course, the majority of pro athletes fall into the highest tax bracket, which means they’re required to pony up 39.6 percent of their income. They get an additional 0.9 percent tacked on to help out with the Affordable Care Act, but their average deductions (such as all those travel expenses) only cut their total percentage to about 33 percent.
How accurate is this figure?
How accurate is any figure that has the IRS involved, no matter which side of the table you’re on? Of course there are some cream-of-the-crop athletes who really make the most of those endorsements, and they’re probably paying more than a million each.
There are those with the best CPAs who get every possible deduction and are probably paying a bit less. Plus, once you add state taxes to the mix, things get more complicated.
States such as Texas and Florida, which have no state income tax, are the places to be, and that’s a key recruiting point. That’s probably the reason Tiger Woods “moved” to Florida from California, since California is notorious for high state taxes.
Even Phil Mickelson has joked that taxes could make him leave California. You may not feel too bad for them, but no matter how much or little you make, you have to have some empathy for Americans who are required to shell out more than 40 percent of what they make to Uncle Sam.
Maybe celebrities and athletes aren’t so different from regular folks after all. Usually, teams only withhold 25 percent of checks for taxes, so if athletes aren’t on top of things, they might be scrambling come April, like the rest of us.
Taxes might also be a reason why so many athletes are cleaning up their online image, compliments of great but costly advertising, so they can score an endorsement to help them with those heavy dues.