Question: Is being in TX an advantage for restructuring?

[Phoenix]

Okay, we know that when teams play out of state, that the players have to allocate a portion of their salary as income earned in that state and pay taxes (and I assume state tax as well?) on it...so...my question is, by moving a ton of "salary" to "bonus", like Romo just did, well, does that result in more money in Romo's pocket in the long run due to not having to pay, say, out of state tax on the bonus part?

 

[Fletch]

Okay, we know that when teams play out of state, that the players have to allocate a portion of their salary as income earned in that state and pay taxes (and I assume state tax as well?) on it...so...my question is, by moving a ton of "salary" to "bonus", like Romo just did, well, does that result in more money in Romo's pocket in the long run due to not having to pay, say, out of state tax on the bonus part?

Always heard that was one of the big draws to living in the greatest state in the nation.

 

[DFWJC]

I think bonus money is allocated as well.

 

[jazzcat22]

Okay, we know that when teams play out of state, that the players have to allocate a portion of their salary as income earned in that state and pay taxes (and I assume state tax as well?) on it...so...my question is, by moving a ton of "salary" to "bonus", like Romo just did, well, does that result in more money in Romo's pocket in the long run due to not having to pay, say, out of state tax on the bonus part?

I think only a few cities does this, like Philly, they have an entertainment tax.
As for paying any state taxes for playing in another state, I don't think it applies. The players do not have an address in that state, and there are ways to get around that if they tried to collect.
I'm not sure of this. But the check would have to come from a company from within that state.
Then they could file for a return and get most of that money back.

 

[WoodysGirl]

I think the players have to pay taxes for the games they play in other cities. So for the 8 games played in other stadiums, they have to pay taxes to the state if the state has an income tax, because they earned money working there.

To answer your question, I don't know if it's an advantage or not, but having more money in your pocket, taxed or not, always seems to be a good thing.

 

[Aven8]

No. The advantage in restructuring is getting all the money owed in a form of a signing bonus!

 

[Longboysfan]

I think the players have to pay taxes for the games they play in other cities. So for the 8 games played in other stadiums, they have to pay taxes to the state if the state has an income tax, because they earned money working there.

To answer your question, I don't know if it's an advantage or not, but having more money in your pocket, taxed or not, always seems to be a good thing.

That's why playing in Texas is like a 3% bonus to most players.
Why 3%. Because half their pay is subject to other places state tax. I'm just taking an average of what I think the number would be.
So 3% if a million is.........

 

[Phoenix]

Okay thanks for the replies. I was just curious if Romo might have been more inclined to restructure because of just being in Texas.

 

[Wheeltax]

I would think that taking the bonus in Texas would be better than the same money paid out as game checks for away games, if my understanding of the tax situation is correct. So instead of having to pay 10% (arbitrary number) of 1m to Mass. after a game in New England, you take half of that as a bonus instead and pay Texas taxes on it, then you only pay Mass's 10% on 500k.

Or something. I don't actually know, just thinking out loud.

 

[dogberry]

If a player is in other states with taxes for sixteen days a season, would the player pay taxes on the percentage of days worked in other states or 8/17th of his seasonal wages?

 

[CyberB0b]

Property taxes are quite a bit more in Texas, so I think it's a wash, unless they live in a modest house. I'd hate to see Troy's property tax bill in Highland Park.

 

[erod]

It should be, but it's not.

Professional athletes are the most financially illiterate people on the planet.

From cost of living, state taxes, real estate prices, and general quality of life, living in Texas is vastly superior to that of New York or Los Angeles. Yet, they flock there.

A $1 million home in Texas would cost $5 million in New York or California, and you could have a few acres of land around it if you wanted still.

 

[Nightman]

Okay thanks for the replies. I was just curious if Romo might have been more inclined to restructure because of just being in Texas.

I don't think people are getting what you are throwing down.

Since Romo's base salary is now 1m instead of 17m that should be the number he is taxed on when it comes to these per game taxes in different cities and states. The restructure bonus check of 16m is not salary anymore, per se.

I don't have the answer, but the same questions apply to Hardy and McClain. Since their base salaries are under 1m, when/if they get suspended or fined, the per game penalty will be much lower.

McClain owes 4 games checks as a fine. 25% of 750k is better than 25% of 4m
If Hardy gets 2 games suspended, 12% of 750k is a lot better than 12% of 13m

 

[xwalker]

Okay, we know that when teams play out of state, that the players have to allocate a portion of their salary as income earned in that state and pay taxes (and I assume state tax as well?) on it...so...my question is, by moving a ton of "salary" to "bonus", like Romo just did, well, does that result in more money in Romo's pocket in the long run due to not having to pay, say, out of state tax on the bonus part?

No, I don't think it so. The tax rate is the same whether it is paid out in a big bonus or over time as a salary.

A restructure just converts that years salary into a signing bonus. The money is all taxable in the same year either way.

 

[CCBoy]

Okay thanks for the replies. I was just curious if Romo might have been more inclined to restructure because of just being in Texas.

Your answer would be yes, it is a definite advantage. Any awards or salary, become a taxable item. One is taxed upon where the business originates, that provides the funds. That this is Texas is very significant and at the amount of money being given, a very strong consideration of reward. Other states would seek very significant funds from Tony Romo's income.

Being able to put away for homes and college funds for all his children would be very significant for him.

 

[viman96]

Texas is not the only state that does not have state taxes. So yes it is an advantage over some teams.

 

[Fredd]

Always heard that was one of the big draws to living in the greatest state in the nation.

what? Tony lives in Pennsylvania? I didn't know that, I'll have to look him up

 

[Vanilla2]

Always heard that was one of the big draws to living in the greatest state in the nation.

New Mexico has state income tax though.

 

[Bigdog]

NY, NJ, Connecticut, RI have some of the highest taxes in the US. NY is one of the most tax state with income, property, school, etc. it also depends on where you live and if your city, village, town is also the county seat because you will get an extra tax I believe. I grew up in NY but moved to CA about 20 yrs ago. I love it when people on CA complain about the taxes. They are surprised when my wife and I tell them that we will take these taxes any day compare to NY.

 

[Fletch]

New Mexico has state income tax though.

Lived there once. Key word, once. 6 months to be exact. All I needed.