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(Complex)   If the Broncos lose on Sunday, Peyton Manning could end up owing more in taxes to New Jersey than he'll make for playing in the game, not including tolls, kickbacks to the Christie campaign and payments to various legitimate waste-hauling businesses   (complex.com ) divider line
    More: Obvious, Peyton Manning, New Jersey, Super Bowl, MetLife  
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2516 clicks; posted to Business » on 29 Jan 2014 at 10:27 AM (2 years ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



44 Comments     (+0 »)
 
View Voting Results: Smartest and Funniest
 
2014-01-29 08:51:18 AM  
He should move, to OMAHA!
 
2014-01-29 08:54:38 AM  
Who doesn't believe we don't need tax reform now?
 
2014-01-29 09:03:55 AM  
An accountant lying? Say it ain't so.
Players actually make out under the tax structure this guy describes. Manning is playing under his 2013 contract. That means that part of his 2013 salary ought to be allocated to 2014, and Manning doesn't just get a Super Bowl payout, but pay from the Broncos. Since his salary is, in fact, the same this year as next, he is already earning 7/200 of 15 million + bonus for the game. So he should pay 60K regardless of whether or not he retires, if you're thinking logically. Which may be more than his bonus, but it's less than his bonus plus pay.
But because New Jersey is goofy, they seem to say he only makes the bonus this week, and that gives Manning, and all other players, an option- if you don't sign a 2014 contract, you can say the only income you received during Super Bowl week was the bonus, and you can pay less in taxes.
 
2014-01-29 09:04:06 AM  
a player with a 15 mil contract only gets 50k for playing in the superbowl? who the hell negotiated that.
 
2014-01-29 09:19:31 AM  
But New Jersey has no claim to that sweet, sweet Papa John's cash.  Suck it, Garden State!
 
2014-01-29 09:26:42 AM  
I'm not an accountant, but that smells like bullshiat.

NJ isn't entitled to tax his entire income, just the portion that he earned when working in NJ.

I work some days in NYC and I only pay city taxes for the days that I'm actually in NYC.
 
2014-01-29 09:50:07 AM  

Eddie Adams from Torrance: NJ isn't entitled to tax his entire income, just the portion that he earned when working in NJ.


He will have earned a lot more assuming he's still with the Broncos when they play the Jets at Met Life next season.

It's called the jock tax.
 
2014-01-29 10:05:01 AM  
31.media.tumblr.com
 
2014-01-29 10:42:15 AM  
Jesus Christ the right wing bullshiat is thick today.  I need to put on my hip waders.
 
2014-01-29 10:45:08 AM  

SauronWasFramed: Who doesn't believe we don't need tax reform now?


Do you live in NJ?
 
2014-01-29 11:18:49 AM  
It's like... all our money.

*sparks joint
 
2014-01-29 11:36:09 AM  

Eddie Adams from Torrance: I'm not an accountant, but that smells like bullshiat.

NJ isn't entitled to tax his entire income, just the portion that he earned when working in NJ.

I work some days in NYC and I only pay city taxes for the days that I'm actually in NYC.


The question is how you source his income.

I assume these guys are prorating his base 2013 (season) salary over all games, including playoffs, and calculating taxes on that. In most sports I would prorate based on games, but for the NFL, total work days is probably better because of how few games were played (which would result in $15 million divided by 24 games). So you are looking at, $15 million over, what, 150 combined practice plus game days? Or $100k per day.

Thenthey are comparing the tax to the increase in pay received for playing in the Superbowl.

So, his incremental pay for the game could be less than his tax.

One big issue the ignore is that most states (even California) give a credit to taxes paid in another state. So, if he isn't playing in a state without state taxes he will recover a bunch of what he pays Jersey and the article is BS.
 
2014-01-29 11:51:13 AM  

dywed88: Eddie Adams from Torrance: I'm not an accountant, but that smells like bullshiat.

NJ isn't entitled to tax his entire income, just the portion that he earned when working in NJ.

I work some days in NYC and I only pay city taxes for the days that I'm actually in NYC.

The question is how you source his income.

I assume these guys are prorating his base 2013 (season) salary over all games, including playoffs, and calculating taxes on that. In most sports I would prorate based on games, but for the NFL, total work days is probably better because of how few games were played (which would result in $15 million divided by 24 games). So you are looking at, $15 million over, what, 150 combined practice plus game days? Or $100k per day.

Thenthey are comparing the tax to the increase in pay received for playing in the Superbowl.

So, his incremental pay for the game could be less than his tax.

One big issue the ignore is that most states (even California) give a credit to taxes paid in another state. So, if he isn't playing in a state without state taxes he will recover a bunch of what he pays Jersey and the article is BS.


Forgot to mention, even if he resides in a state with no state income tax, most of the income sourced to the New Jersey for the Super Bowl would otherwise be sourced to Colorado and smaller amounts from other states, so this increase in New Jersey taxes would still directly offset (ie reduce) other state income taxes (and if a net increase, be a Federal itemized deduction to slightly reduce Federal Income taxes).

So, yeah, the article is pretty much BS.

And this assumes his accountants don't simply claim that the salary is for regular season only and source only incremental income for his playoff appearances. Certainly a position that can be taken.
 
2014-01-29 11:54:09 AM  

dywed88: And this assumes his accountants don't simply claim that the salary is for regular season only and source only incremental income for his playoff appearances. Certainly a position that can be taken.


This is the position that should be taken, as salary really is for the regular season and not playoffs. Playoff money comes from the NFL pool, not from the teams. The only income that NJ has a claim to is the Super Bowl bonus and the game check for next season. Nothing else.
 
2014-01-29 11:55:37 AM  

dywed88: dywed88: Eddie Adams from Torrance: I'm not an accountant, but that smells like bullshiat.

NJ isn't entitled to tax his entire income, just the portion that he earned when working in NJ.

I work some days in NYC and I only pay city taxes for the days that I'm actually in NYC.

The question is how you source his income.

I assume these guys are prorating his base 2013 (season) salary over all games, including playoffs, and calculating taxes on that. In most sports I would prorate based on games, but for the NFL, total work days is probably better because of how few games were played (which would result in $15 million divided by 24 games). So you are looking at, $15 million over, what, 150 combined practice plus game days? Or $100k per day.

Thenthey are comparing the tax to the increase in pay received for playing in the Superbowl.

So, his incremental pay for the game could be less than his tax.

One big issue the ignore is that most states (even California) give a credit to taxes paid in another state. So, if he isn't playing in a state without state taxes he will recover a bunch of what he pays Jersey and the article is BS.

Forgot to mention, even if he resides in a state with no state income tax, most of the income sourced to the New Jersey for the Super Bowl would otherwise be sourced to Colorado and smaller amounts from other states, so this increase in New Jersey taxes would still directly offset (ie reduce) other state income taxes (and if a net increase, be a Federal itemized deduction to slightly reduce Federal Income taxes).

So, yeah, the article is pretty much BS.

And this assumes his accountants don't simply claim that the salary is for regular season only and source only incremental income for his playoff appearances. Certainly a position that can be taken.


New Jersey state income tax laws are very simple - you take the number of days you work in the state, divide them by the total number of days during the year you work for that employer, and multiply that by the total amount of money you receive from the employer over the course of the year.  It doesn't matter, for New Jersey's purposes, if the $15 million regular season payment is "for regular season only"; it's compensation during the course of the year, so New Jersey gets their percentage of it.
 
2014-01-29 11:58:28 AM  

The_Six_Fingered_Man: dywed88: And this assumes his accountants don't simply claim that the salary is for regular season only and source only incremental income for his playoff appearances. Certainly a position that can be taken.

This is the position that should be taken, as salary really is for the regular season and not playoffs. Playoff money comes from the NFL pool, not from the teams. The only income that NJ has a claim to is the Super Bowl bonus and the game check for next season. Nothing else.


Except, as the CPA from a company in New Jersey who specializes in these taxes say in the Forbes article that this article links to, that would not be the right way to calculate his income.
 
2014-01-29 11:59:40 AM  
Colorado and Washington, it's the Stoner Bowl XXX!
 
2014-01-29 12:05:45 PM  

dywed88: Eddie Adams from Torrance: I'm not an accountant, but that smells like bullshiat.

NJ isn't entitled to tax his entire income, just the portion that he earned when working in NJ.

I work some days in NYC and I only pay city taxes for the days that I'm actually in NYC.

The question is how you source his income.

I assume these guys are prorating his base 2013 (season) salary over all games, including playoffs, and calculating taxes on that. In most sports I would prorate based on games, but for the NFL, total work days is probably better because of how few games were played (which would result in $15 million divided by 24 games). So you are looking at, $15 million over, what, 150 combined practice plus game days? Or $100k per day.

Thenthey are comparing the tax to the increase in pay received for playing in the Superbowl.

So, his incremental pay for the game could be less than his tax.

One big issue the ignore is that most states (even California) give a credit to taxes paid in another state. So, if he isn't playing in a state without state taxes he will recover a bunch of what he pays Jersey and the article is BS.


NFL players are only paid 2 ways, bonuses and game checks.   So if he plays he''d make that $15 million over 20 games (are they still doing 4 preseason games next year?), this article alludes to them not getting paid for preseason games but I thought I read somewhere that they are.
http://www.wfaa.com/sports/blogs/How-NFL-players-are-paid-117414938. ht ml

So yeah that's a lot of scratch per game to have to pay out to each state you play in.
 
2014-01-29 12:06:43 PM  

meanmutton: dywed88: dywed88: Eddie Adams from Torrance: I'm not an accountant, but that smells like bullshiat.

NJ isn't entitled to tax his entire income, just the portion that he earned when working in NJ.

I work some days in NYC and I only pay city taxes for the days that I'm actually in NYC.

The question is how you source his income.

I assume these guys are prorating his base 2013 (season) salary over all games, including playoffs, and calculating taxes on that. In most sports I would prorate based on games, but for the NFL, total work days is probably better because of how few games were played (which would result in $15 million divided by 24 games). So you are looking at, $15 million over, what, 150 combined practice plus game days? Or $100k per day.

Thenthey are comparing the tax to the increase in pay received for playing in the Superbowl.

So, his incremental pay for the game could be less than his tax.

One big issue the ignore is that most states (even California) give a credit to taxes paid in another state. So, if he isn't playing in a state without state taxes he will recover a bunch of what he pays Jersey and the article is BS.

Forgot to mention, even if he resides in a state with no state income tax, most of the income sourced to the New Jersey for the Super Bowl would otherwise be sourced to Colorado and smaller amounts from other states, so this increase in New Jersey taxes would still directly offset (ie reduce) other state income taxes (and if a net increase, be a Federal itemized deduction to slightly reduce Federal Income taxes).

So, yeah, the article is pretty much BS.

And this assumes his accountants don't simply claim that the salary is for regular season only and source only incremental income for his playoff appearances. Certainly a position that can be taken.

New Jersey state income tax laws are very simple - you take the number of days you work in the state, divide them by the total number of days during the year you work for that employer, ...


So if I work a minimum wage job in NJ for two weeks and then move to Kansas where I take a $500,000/yr job I have to pay NJ taxes as though I made $5,000 during the two weeks I was in NJ instead of the $600 or so I actually earned?  That seems pretty messed up.  And doesn't that leave you open to being taxed twice for the same income, since Kansas is going to tax me based on my $500,00 income earned in-state?
 
2014-01-29 12:12:23 PM  

meanmutton: dywed88: dywed88: Eddie Adams from Torrance: I'm not an accountant, but that smells like bullshiat.

NJ isn't entitled to tax his entire income, just the portion that he earned when working in NJ.

I work some days in NYC and I only pay city taxes for the days that I'm actually in NYC.

The question is how you source his income.

I assume these guys are prorating his base 2013 (season) salary over all games, including playoffs, and calculating taxes on that. In most sports I would prorate based on games, but for the NFL, total work days is probably better because of how few games were played (which would result in $15 million divided by 24 games). So you are looking at, $15 million over, what, 150 combined practice plus game days? Or $100k per day.

Thenthey are comparing the tax to the increase in pay received for playing in the Superbowl.

So, his incremental pay for the game could be less than his tax.

One big issue the ignore is that most states (even California) give a credit to taxes paid in another state. So, if he isn't playing in a state without state taxes he will recover a bunch of what he pays Jersey and the article is BS.

Forgot to mention, even if he resides in a state with no state income tax, most of the income sourced to the New Jersey for the Super Bowl would otherwise be sourced to Colorado and smaller amounts from other states, so this increase in New Jersey taxes would still directly offset (ie reduce) other state income taxes (and if a net increase, be a Federal itemized deduction to slightly reduce Federal Income taxes).

So, yeah, the article is pretty much BS.

And this assumes his accountants don't simply claim that the salary is for regular season only and source only incremental income for his playoff appearances. Certainly a position that can be taken.

New Jersey state income tax laws are very simple - you take the number of days you work in the state, divide them by the total number of days during the year you work for that employer, and multiply that by the total amount of money you receive from the employer over the course of the year.  It doesn't matter, for New Jersey's purposes, if the $15 million regular season payment is "for regular season only"; it's compensation during the course of the year, so New Jersey gets their percentage of it.


That is the basic case and applies for most situations, but isn't true for some complex cases.

Different income (from the same employer) can and is sourced on a different basis.

Note the "cannot be readily determined" part in their instructions. If I am being paid a specific amount for this one game, it can be readily determined.
 
2014-01-29 12:15:04 PM  

rugman11: So if I work a minimum wage job in NJ for two weeks and then move to Kansas where I take a $500,000/yr job I have to pay NJ taxes as though I made $5,000 during the two weeks I was in NJ instead of the $600 or so I actually earned?  That seems pretty messed up.  And doesn't that leave you open to being taxed twice for the same income, since Kansas is going to tax me based on my $500,00 income earned in-state?


New Jersey:  Screw You, we got ours.
 
2014-01-29 12:15:13 PM  
How many players and teams would go in for it if the teams simply paid players double for the home games, leaving the states with jock taxes with a big fat bag of bupkes?
 
2014-01-29 12:22:18 PM  

DoBeDoBeDo: dywed88: Eddie Adams from Torrance: I'm not an accountant, but that smells like bullshiat.

NJ isn't entitled to tax his entire income, just the portion that he earned when working in NJ.

I work some days in NYC and I only pay city taxes for the days that I'm actually in NYC.

The question is how you source his income.

I assume these guys are prorating his base 2013 (season) salary over all games, including playoffs, and calculating taxes on that. In most sports I would prorate based on games, but for the NFL, total work days is probably better because of how few games were played (which would result in $15 million divided by 24 games). So you are looking at, $15 million over, what, 150 combined practice plus game days? Or $100k per day.

Thenthey are comparing the tax to the increase in pay received for playing in the Superbowl.

So, his incremental pay for the game could be less than his tax.

One big issue the ignore is that most states (even California) give a credit to taxes paid in another state. So, if he isn't playing in a state without state taxes he will recover a bunch of what he pays Jersey and the article is BS.

NFL players are only paid 2 ways, bonuses and game checks.   So if he plays he''d make that $15 million over 20 games (are they still doing 4 preseason games next year?), this article alludes to them not getting paid for preseason games but I thought I read somewhere that they are.
http://www.wfaa.com/sports/blogs/How-NFL-players-are-paid-117414938. ht ml

So yeah that's a lot of scratch per game to have to pay out to each state you play in.


Just because they are paid per game day, doesn't mean that the IRS (and state authorities) would source on that basis.

They rely on the concept of "substance over form" that means they will view it based on the economic substance and not the contract itself. Just like you can't sign a contract that says "This person is an independant contractor" to get out of withholdings and payroll taxes if the person functions as an employee.

The IRS (and state tax authorities) can look and say that "this contract is signed on the basis that he will participate in preseason and playoff games so we are allocating this income over those games as well." Most cases they would include all work days (ie include practices and workouts) but it is commonly accepted to source a pro athlete's income over game days.
 
2014-01-29 12:27:44 PM  

Gulper Eel: How many players and teams would go in for it if the teams simply paid players double for the home games, leaving the states with jock taxes with a big fat bag of bupkes?


And the IRS (with games in London and Toronto they are certainly relevant) and state tax authorities say, "lol" and ignore it on the basis of substance over form.

These types of work arounds have been attempted since income taxes were introduced.
 
2014-01-29 12:34:42 PM  

rugman11: meanmutton: dywed88: dywed88: Eddie Adams from Torrance: I'm not an accountant, but that smells like bullshiat.

NJ isn't entitled to tax his entire income, just the portion that he earned when working in NJ.

I work some days in NYC and I only pay city taxes for the days that I'm actually in NYC.

The question is how you source his income.

I assume these guys are prorating his base 2013 (season) salary over all games, including playoffs, and calculating taxes on that. In most sports I would prorate based on games, but for the NFL, total work days is probably better because of how few games were played (which would result in $15 million divided by 24 games). So you are looking at, $15 million over, what, 150 combined practice plus game days? Or $100k per day.

Thenthey are comparing the tax to the increase in pay received for playing in the Superbowl.

So, his incremental pay for the game could be less than his tax.

One big issue the ignore is that most states (even California) give a credit to taxes paid in another state. So, if he isn't playing in a state without state taxes he will recover a bunch of what he pays Jersey and the article is BS.

Forgot to mention, even if he resides in a state with no state income tax, most of the income sourced to the New Jersey for the Super Bowl would otherwise be sourced to Colorado and smaller amounts from other states, so this increase in New Jersey taxes would still directly offset (ie reduce) other state income taxes (and if a net increase, be a Federal itemized deduction to slightly reduce Federal Income taxes).

So, yeah, the article is pretty much BS.

And this assumes his accountants don't simply claim that the salary is for regular season only and source only incremental income for his playoff appearances. Certainly a position that can be taken.

New Jersey state income tax laws are very simple - you take the number of days you work in the state, divide them by the total number of days during the year you work for that employer, ...

So if I work a minimum wage job in NJ for two weeks and then move to Kansas where I take a $500,000/yr job I have to pay NJ taxes as though I made $5,000 during the two weeks I was in NJ instead of the $600 or so I actually earned?  That seems pretty messed up.  And doesn't that leave you open to being taxed twice for the same income, since Kansas is going to tax me based on my $500,00 income earned in-state?


Hell no.

That would be ridiculous.

At the very least you would calculate the income on an emplyer by employer basis. Also, in your example you would likely be a NJ resident for the first part of the year.

An issue with the simple method discussed would be, you reside in the state of New York while attending school and work part time in New Jersey for a low wage. Then you graduate, get a new job in the company that is substantially higher paying and work outside New Jersey and your employer issues one W-2.

And then you are still unlikely to do a straight days calculation.
 
2014-01-29 12:36:13 PM  

Cheops: rugman11: So if I work a minimum wage job in NJ for two weeks and then move to Kansas where I take a $500,000/yr job I have to pay NJ taxes as though I made $5,000 during the two weeks I was in NJ instead of the $600 or so I actually earned?  That seems pretty messed up.  And doesn't that leave you open to being taxed twice for the same income, since Kansas is going to tax me based on my $500,00 income earned in-state?

New Jersey:  Screw You, we got ours.


The liberals on Fark believe you should have to pay even more of that $500,000 to them.  To be fair and all.
 
2014-01-29 12:37:00 PM  

Gulper Eel: How many players and teams would go in for it if the teams simply paid players double for the home games, leaving the states with jock taxes with a big fat bag of bupkes?


How about if the players got together and said no more Super Bowl's in a N.J. based stadium? They may have reasons to do that anyway  just based upon the weather. Granted the players don't control it, the owners do, but it might be more likely to succeed using that approach. My guess is either way he can afford the tax payment easily.
 
2014-01-29 12:43:28 PM  
As long as I'm taxed in the places where I earn my money, so should Manning be. I live outside the city, but work inside the city. And I'm taxed by the city.
 
2014-01-29 12:44:01 PM  
I think we can safely assume Peyton Manning has a real life accountant and financial advisor and doesn't take dodgy advice from a columnist for Forbes.  So he will be just fine.

/then again - he is a football player ...
 
2014-01-29 12:44:43 PM  

Three Crooked Squirrels: But New Jersey has no claim to that sweet, sweet Papa John's cash.  Suck it, Garden State!


I'd rather pay more in taxes than have to eat Papa John's pizza.
 
2014-01-29 12:45:10 PM  
He could argue that since the money comes from different places it's from different employers.

1. Regular Season Earnings:  Denver Broncos
2. Playoff Earnings:  NFL
 
2014-01-29 12:48:43 PM  
A smart agent would write up a $10 million contract that says the player gets $2 million for playing at Miami, $2 million at Dallas, $2 million at Tampa, $2 million at Texas and $2 million at Jacksonville. The rest of the games, he's paid a dollar. No state taxes in those places, right?
 
2014-01-29 12:58:11 PM  

Nemo's Brother: Cheops: rugman11: So if I work a minimum wage job in NJ for two weeks and then move to Kansas where I take a $500,000/yr job I have to pay NJ taxes as though I made $5,000 during the two weeks I was in NJ instead of the $600 or so I actually earned?  That seems pretty messed up.  And doesn't that leave you open to being taxed twice for the same income, since Kansas is going to tax me based on my $500,00 income earned in-state?

New Jersey:  Screw You, we got ours.

The liberals on Fark believe you should have to pay even more of that $500,000 to them.  To be fair and all.


Awe, did you not read how (while it may be the best kind of correct) it is, at best, disengenuous due to credits on his home state tax and/or reduction of Colorado taxable income.

The only people that may gret screwed are Seahawks players who reside in Washinto (or another state without a state income tax).
 
2014-01-29 01:03:43 PM  

ChrisDe: A smart agent would write up a $10 million contract that says the player gets $2 million for playing at Miami, $2 million at Dallas, $2 million at Tampa, $2 million at Texas and $2 million at Jacksonville. The rest of the games, he's paid a dollar. No state taxes in those places, right?


You think Colorado and other tax authorities would fall for that?

If you can think of a scheme without an in depth knowledge of tax, others almost certainly have already tried it and failed. You may get away because you are a small fry and your return gets rubber stamped if you didn't do anything dumb or get really unlucky, Manning isn't and would almost certainly get caught.

Also, that requires you state of residence to be a state with not taxes as well.
 
2014-01-29 01:48:39 PM  

ChrisDe: A smart agent would write up a $10 million contract that says the player gets $2 million for playing at Miami, $2 million at Dallas, $2 million at Tampa, $2 million at Texas and $2 million at Jacksonville. The rest of the games, he's paid a dollar. No state taxes in those places, right?


Yeah, you probably were able to use 30 seconds of uneducated thought to come up with a scheme that taxing agencies across the country haven't been able to think of. Makes sense.
 
2014-01-29 02:15:13 PM  

NickelP: a player with a 15 mil contract only gets 50k for playing in the superbowl? who the hell negotiated that.


um, the guy that negotiated a 50 million dollar contract


But that does put the article into perspective, no?  Everyone have a cry over Manning working for free!  Taxes are Evil!  herp-a-conservaderp!
 
2014-01-29 03:12:35 PM  
But really, New Jersey is the worst state for taxes.
 
2014-01-29 03:49:09 PM  

jigger: But really, New Jersey is the worst state for taxes.


Not even close.

New York and California are probably the worst.

You never want to deal with the Franchise Tax Board. And the community property issues without Foreign Tax Credits, ugh.

Also, I would point out that you can have a marginal tax rate of upwards of 80% in New York. Actually had a client who after sending him his return he went "oh, I missed this 1099" and he was pissed when he found out it was a 76% tax rate in New York (plus 36% Federal) on it. At a certain point (I think $2 million, but it has been a while) New York eleminates the benefit from the lower rate brackets over about $50k of income. For that $50k you get a mazzive rate (this guy had about $30k additional income in that band).

I don't feel sorry for him, he had more than enough income, but just a New York horror story (though I think a few other states also have these rules) and I think they should extend the window in which they eliminate the lower rate benefits.
 
2014-01-29 04:35:36 PM  

NickelP: a player with a 15 mil contract only gets 50k for playing in the superbowl? who the hell negotiated that.


The NFLPA, and him in particular, during the last lockout.

Because if a team had Super Bowl bonuses, they would be screwing themselves on the salary cap the following season.
 
2014-01-29 04:42:17 PM  

jigger: But really, New Jersey is the worst state for taxes.


Property taxes yes, income taxes they are high but not the worst.
 
2014-01-29 06:09:14 PM  

ChrisDe: A smart agent would write up a $10 million contract that says the player gets $2 million for playing at Miami, $2 million at Dallas, $2 million at Tampa, $2 million at Texas and $2 million at Jacksonville. The rest of the games, he's paid a dollar. No state taxes in those places, right?


Some are a flat tax. For example some visiting nhlers lose money every time the play in nashville, because its a flat rate of 3k per game.

But the nhlpa negotiated that the league would pay these particular tax bills
 
2014-01-29 06:12:27 PM  
I think the bigger question is what is his tax bill this year if he didn't play in the super bowl. If its still $40k then he's not losing money by losing.

They clearly say if he retired he'd owe $800. Presumably the other 40k is from making a shade under a million there during the season... He'd pay it win, lose, or had he lost last week.
 
2014-01-29 07:18:29 PM  

ncsu_wolfpack: I think the bigger question is what is his tax bill this year if he didn't play in the super bowl. If its still $40k then he's not losing money by losing.

They clearly say if he retired he'd owe $800. Presumably the other 40k is from making a shade under a million there during the season... He'd pay it win, lose, or had he lost last week.


Basically he is saying that:

If Manning plays next year, a portion of his 2014 salary will have to be allocated to the Super Bowl game. Manning will then have to pay New Jersey tax on that income.
If Manning doesn't play in 2014, he has no income to allocate and only pays New Jersey tax on the Super Bowl income.

Now, this is generall correct under a few assumptions. I have never done an NFL player's taxes so I can't say whether they are normal or not:
1) All 2013 salary is received in 2013 and none is allocated to 2014.
2) His 2014 salary is allocated over the 2013 playoffs. And not just income directly related to those games.
3) He doesn't have trailing compensation (no Pro Bowl of other bonus).

Now there are issues:
1) He calculations are wrong. New Jersey marginal tax rates are based on worldwide income and I would assume Manning has significant outside income (sponsorships, investments, etc) so he would probably be paying closer to the top marginal rate on all income (around $3,500).
2) If Manning resides in a state with income taxes, he will most likely get a credit to reduce those taxes based on his NJ taxes.
3) If Manning resides in a state without taxes, this results in less income allocated to CO and other taxing states where he played resulting in lower taxes in those states.
 
2014-01-29 08:55:42 PM  

monoski: jigger: But really, New Jersey is the worst state for taxes.

Property taxes yes, income taxes they are high but not the worst.


New York's property taxes are higher than New Jersey's, and that's not just comparing the NJ suburbs of NYC to Long Island or Westchester.

If you're stuck in western New York with some shiatbox that isn't even worth a hundred grand, you can still get boned for a $3000 property tax bill every year.
 
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