Such a scam. This should all be easily handled on the IRS website by the government and your employer. Any tax documents you receive should already be calculated in your return and you should be able log in to the IRS website to confirm or adjust it starting on February 1st. Done. Should be incredibly simple for the vast majority of people. People who need more should be able to drill in and do more and hire an accountant if needed.
According to ESPN article, Ainge didn't even know what trade he was facilitating until it was too late. Just crazy how the deal all went down and it's not lost on people around the league about how the new Dallas owners made their fortune in Vegas and wouldn't mind getting the team that's pegged for there. The grand idea was to get a casino built in the DFW and move the team out of downtown Dallas, but despite all their attempts, the owners haven't been able to sway the Texas politicians to legalize gambling and/or their casino. A lot of layers that make you wonder to this one.
Your the one that brought up federal taxes with your incorrect comment "the special IRS provision that allows professional athletes to be taxed by various jurisdictions where games are played require residency in the state" The statement "members of an LLC are subject" is an inherently incorrect tax statement as an LLC is a legal classification and is not a tax classification. An LLC can be on any of any of an individual/partnership/scorp/ccorp return. Technically Texas is not pure 0% CCorp/Scorp tax. It has a franchise tax of 0.375-0.75% above 1.23 million
Thats basically how its done in Europe. Plenty of problem is Europe though - their health care sucks (I lived there 4 months) Taxes are far simpler in the US if you only have wages from a job though. It gets exponentially harder when you have a bunch of states and businesses/investments.
Their healthcare gets better results in a lot of critical areas than ours does. And sucky healthcare is better than no healthcare. Or being trapped at a job you hate or being unable to start a business because you can't afford to go without healthcare. In the US, even if you just have a job taxes should still be much simpler. You shouldn't even have to approve anything unless you want to. They should just send/deposit your return or send you a bill.
you edited out the last part of that sentence that said "where games are played require residency in the state of the employer". In this case, Doncic will be employed by the California corporation, the Los Angeles Lakers (or whatever their legal name is). I may have been unclear in defintions but not in impact incorrect California has a franchise tax too it's actually a little more complicated than a strict 1/82 apportionment. A lot of states base jock taxes on 'duty days' and they have different definitions for duty days. I suspect that 100% of salary isn't apportioned by the 82 game formula. Most players don't play games from mid-May to late October, but they are getting monthly compensation. One reason summer league is played in Las Vegas and Orlando is those states don't have income tax and as I mentioned, I imagine there are many shelters, loopholes, and dodges for endorsement income. However, if Doncic is getting endorsement income from a CA corporation or entity while he's a resident of CA, I'd imagine CA will be insisting on their cut this is all jabber anyway. There is no doubt at all that Doncic will be paying a lot more taxes as a Laker than he was as a Mav, which is the main point. Now, he is a foreign national so there may be some further complexity because of that
SharpesTriumph is right. LLC is not a tax classification. A LLC can be various tax entities. A single member LLC would be a sole proprietorship unless they did something like elect to be a S-Corporation. It defaults to a sole prop, which IS a tax classification (just reported as a Schedule C on their personal return).
@wizenheimer link to your residency "special rule?" That's not anything I have ever heard. There are residency rules, but in layman's terms, a player would have their residency (things that go into that are like where their kids go to school, where they attend social gatherings, where are the bank accounts from, are they members of clubs, how much time did they spend there, where do they work, etc all go into an evidence category to provide a strong case). If the player is on a team located in a state the player is not a resident of, the player would pay based on income from games played in the state. When they file a return in their resident state, they include all income. To avoid double taxation, generally the resident state allows for a credit for taxes paid to another state.
and I never said LLC's are a "tax classification", whatever that means. I'm not even sure what relevance it has what I said was "LLC's have different tax rates, in different states, but there will still be some liability" the liability I was talking about was tax liability and I said I was unclear about that...delete it from the discussion if you want. I'll evens say I got that backasswards if it will help bottom line though is that based on a jock tax apportioned by 82 games, as a Laker, approximately 65% of Doncic's NBA salary will be taxed at California's 13.3% rate. As a Maverick, approximately 60% of his salary was taxed at the 0% rate in Texas. That's a pretty hefty change But I'd wonder if it's more complicated than that based up duty days: "The jock tax is calculated based on duty days. Duty days are the days a player has during a professional season. If a player has 100 duty days during his season and spends 10 days in a certain state or city, thus 10% of his income earned during that season would be allocated to that state." does the season include training camp? During the season do players spend more that 50% of their time at home? if a player is injured and misses games does his formula change? Might want to be healthy for road games to Texas and Florida. The other side of that coin is if your team has a 5 game road trip thru California and Oregon, those might be advantageous games to miss
Tax classifications have lots of relevance. There are plenty of different rules between different entities that can affect what your tax liability ends up being. LLCs pay $800 in annual tax in California. It's basically an excuse tax. The tax entity is what they get taxed at different rates.
Yeah, it auto corrected to excuse but it should have said "excise." Oregon has an excise tax but it's $150 and it based on certain tax classifications.
