Professional Athletes Could Be Getting a Big Tax Victory in Cleveland

Professional Athletes Could Be Getting a Big Tax Victory in Cleveland

Professional Athletes Could Be Getting a Big Tax Victory in Cleveland

Millions of sports fans all over the country love their favorite teams and athletes. A large majority of professional athletes from all walks of the sporting world make a lot of money and are some of the highest paid individuals in the country. While some fans take exception to how much money professional athletes make, most fans don’t care as long as they are helping their favorite team win. However, regardless of whether or not you think athletes make too much money, the fact is, professional sports stars also pay a lot of money in taxes. In fact, many of them, depending on where they live and what sport they play; pay a significant portion of their income to the taxman.

Cleveland Jock-Tax Is Unfair

Besides all the normal taxes that everyday citizens pay professional athletes pay the so-called “jock tax.” The dreaded jock tax is like a double whammy for many athletes, because they end up paying taxes twice on the same income, depending on what city they were physically located in when they earned the money. Over the past couple of years, however, some athletes have started to fight back, especially against the city of Cleveland, Ohio. So what makes Cleveland different from any other city in the United States? Many states charge athletes a jock tax, but Cleveland charged a city tax on athletes who play their sport within city limits, as well. However, that is all going to change now that the Ohio State Supreme Court has ruled that Cleveland’s tax on athletes is unconstitutional.

Good News for Athletes

So what does the change mean for athletes that play their sport in Cleveland? First, it means that the city’s jock tax formula has changed and going forward athletes will pay a lot less to the Cleveland when they play in the city. That’s because they will now be charged on the number of days they work and not on the number of games they play. It also means that any athlete, no matter the sport, will be able to file for a refund from the city for a portion of the taxes it paid to the city during the last three years. According to one estimate, the city could end up paying as much as $2.4 million in refunds to players from all professional sports. Meanwhile, the city’s tax department said that going forward it could lose as much as $1 million every year due to the new formula that will now be used.

Victory Is Ours

It is not clear how many athletes will come forward and seek a refund. For many of the lower-paid athletes the refund would only amount to a few hundred dollars, which means some will likely just skip the hassle. However, for some of the top earning athletes, such as those in the NFL that make more than $1 dollars in a single game the extra money could be worth fighting for, especially if they made multiple visits to Cleveland over that last three years. In any case, the ruling by the court does mark a victory for professional athletes everywhere against the dreaded jock tax.

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Alan Olsen, CPA

Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com.  GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.

Alan L. Olsen, CPA, Wikipedia Bio

 

 

GROCO.com is a proud sponsor of The American Dreams Show.

 

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The American Dreams show was the brainchild of Alan Olsen, CPA, MBA. It was originally created to fill a specific need; often inexperienced entrepreneurs lacked basic information about raising capital and how to successfully start a business.

Alan sincerely wanted to respond to the many requests from aspiring entrepreneurs asking for the information and introductions they needed. But he had to find a way to help in which his venture capital clients and friends would not mind.

The American Dreams show became the solution, first as a radio show and now with YouTube videos as well. Always respectful of interview guest’s time, he’s able to give access to individuals information and inspiration previously inaccessible to the first-time entrepreneurs who need it most.

They can listen to venture capitalists and successful business people explain first-hand, how they got to where they are, how to start a company, how to overcome challenges, how they see the future evolving, opportunities, work-life balance and so much more..

American Dreams discusses many topics from some of the world’s most successful individuals about their secrets to life’s success. Topics from guest have included:

Creating purpose in life / Building a foundation for their life / Solving problems / Finding fulfillment through philanthropy and service / Becoming self-reliant / Enhancing effective leadership / Balancing family and work…

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MyPaths.com (Also sponsored by GROCO) provides free access to content and world-class entrepreneurs, influencers and thought leaders’ personal success stories. To help you find your path in life to true, sustainable success & happiness.  It’s mission statement:

In an increasingly complex and difficult world, we hope to help you find your personal path in life and build a strong foundation by learning how others found success and happiness. True and sustainable success and happiness are different for each one of us but possible, often despite significant challenges.

Our mission at MyPaths.com is to provide resources and firsthand accounts of how others found their paths in life, so you can do the same.

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