If he wins Super Bowl 50, the players share for Carolina Panthers starting quarterback Cam Newton will likely be over $100,000!
On-the-other-hand if he is on the losing end, his players share will only be about half as much.
But whatever the final score of the game ends-up being, suffice it to say that one of the biggest winners will be the general fund of the State of California.
And, for the athletes and other team personnel, the tax bill ultimately received will absolutely be nothing to cheer about!
Financial Tale Of The Super Bowl 50 Tape!
In a guest article written for Forbes.com CPA Sean Packard, a tax specialist for professional athletes at Octagon Financial Services, explains the way in whichALL of the participants in Sunday’s game are going to get financially sacked!
‘California Taxes Will Eat Up All Of Cam Newton’s Super Bowl Earnings‘
Remember when Peyton Manning paid New Jersey nearly $47,000 in taxes two years ago on his Super Bowl earnings of $46,000? Manning has nothing on the state taxes facing Carolina Panthers quarterback Cam Newton for Super Bowl 50 in Santa Clara, Calif. Newton is looking at a tax bill more than twice as much, which will swallow up his entire Super Bowl paycheck, win or lose, thanks to California’s tops-in-the-nation tax rate of 13.3%.
Before we get into the numbers, let’s do a quick review of the jock tax rules applied to professional athletes (similar tax rules apply to anyone doing business across state lines, but they are rarely enforced). States tax a player based on their calendar-year income. They apply a duty day calculation which takes the ratio of duty days within the state over total duty days for the year. That ratio is then multiplied by the player’s salary to arrive at a state’s allocable income.
In 2014, Manning would have paid New Jersey a 51% rate on his $92,000 earned had the Denver Broncos won Super Bowl 48. Unfortunately for them and Manning’s legacy, they were blown out by a Seattle Seahawks team that knew the right plays to call all night. So Manning paid a whopping 102% tax to New Jersey on his $46,000 consolation prize.
Skip ahead two years and now Manning is back in the Super Bowl against the highly-talented and highly-compensated Cam Newton, who signed a five-year, $103.8 million contract extension in June. Newton has already earned $58,800 so far this year for week 17 of the 2015 season and $71,000 in playoff bonuses. Newton is due a $10 million signing bonus and $13 million in base salary for the 2016 season, which he will receive the full amount during the regular season. Luckily, week 17 next season will occur on New Year’s Day 2017, thus shielding about $765,000 from California’s grasp.
Read the rest of the article at Forbes.com here.Google+