The Los Angeles Lakers celebrated a historic win in the new In-Season Tournament, bagging a hefty $500,000 prize for each player. However, the joy took a hit when taxes stepped in. Federal tax, California taxes, and payroll taxes carved a significant chunk, leaving players with $231,000. The glittering $500k prize suddenly felt lighter – $269,000 lighter.
LeBron James, not in need of the extra cash for survival, exemplifies how taxes eat into even substantial earnings. While top names like James or Curry might weather the storm, players earning far less could have greatly benefited from the full prize.
Jock Tax Challenges: Navigating Income Tax in Every NBA State
Now, let’s dissect the taxes NBA players must navigate.Imagine a player with a $40 million salary and $60 million from endorsements, totaling $100 million. Federal Income Tax, reaching up to 37%, claims $37 million. State Income Tax, distinct from the jock tax, is levied by the state where one lives and works. Jock Tax, a real headache for NBA players, adds another layer as players face income tax in every state they play. These rates fluctuate depending on each state.
Agent Fees, though not a direct tax, demand 3-5% of earnings. While not exhaustive, these four taxes create a complex financial landscape for players.
Read More : LeBron Makes History: Becomes In-Season Tournament MVP
In essence, players are navigating through pages of tax regulations by year-end. The intricacies may vary, but the fundamentals remain. High-earning athletes, despite their glamorous public image, grapple with a taxing reality that extends beyond the basketball court.
