Archive for the ‘Professional Athlete Tax’ Category

Tax Hints for Pro Gamers

Saturday, February 11th, 2017

As a gamer competing in eSports, you’re facing some big financial decisions and filing taxes needs to be a high priority. Some pro gamers are taking too many chances with the Internal Revenue Service (IRS) by not complying with U.S. tax laws. Different countries have different rules regarding income that must be declared. Americans, no matter where they earn their money, are required to report worldwide income on their U.S. income tax returns.

Internationals competing in the U.S. must also abide by U.S. tax laws and may be taxed on their worldwide income or U.S.-only income, depending on the circumstances. Various states and cities in the U.S. also have unique tax and reporting requirements. Additionally, disclosure of foreign bank accounts to the U.S. Department of Treasury may be mandatory. Failure to do so can result in steep fines.

Certified Public Accountants (CPAs) who are fluent with the international aspects of the U.S. tax code can help you navigate the complex rules. They also understand the provisions in the U.S. tax code which provide relief from double taxation for pro gamers.

Here are a few tax tips for gamers to keep in mind:

Take advantage of alternative business structures to significantly cut your tax bill. For gamers who earn $10,000 or more of net business income per month, tax-advantaged strategies can be implemented to save over $12,000 per year (in taxes, net of all fees). The more a gamer earns, the greater the immediate tax savings can be. Plus, sizable retirement savings can be accumulated in a short period of time.

You can save tax money by keeping good records for all gaming-related expenses and your days in and out of the U.S. These include expenses such as agent fees, computer equipment, software, visa/legal fees, and travel costs that you incur as a pro gamer. We provide our clients with a questionnaire to identify expenses which are potentially deductible. Tracking U.S. and foreign travel days is also a factor for determining how gamers are treated in the eyes of the U.S. and foreign tax authorities.

All income is not treated equally. Gamers may receive income in a variety of ways, such as salaries from teams, streaming fees, endorsement income, revenue share on in-game items, stream donations, tournament prizes, and coaching sessions. Tax rates and deductions vary based on the type of income. Employers are required to withhold income taxes on your salaries as an employee. However, those other types of income may not have any taxes withheld on them, so you are responsible for paying the taxes.

Retain the services of tax consultants who are experts in serving pros. You want to make sure you are paying the lowest, legal amount of taxes possible. Gamers are allotted special tax deductions based on their profession. You should retain a CPA firm that is experienced, that charges reasonable rates, and that understands how to optimize all the tax deductions available to you as a pro gamer.

Remember that paying taxes is an obligation of every U.S. citizen, resident, and visitor who earns money in the U.S. Failing to declare what you earn to the IRS is a form of tax evasion. The penalties can be severe, including jail time and hefty fines. An experienced CPA can help you avoid those penalties.

For more information or to speak with an experienced tax professional knowledgeable about international taxes for gamers, please call us at (804) 557-2648, email TaxPro@ProSportCPA.com, or visit www.ProSportCPA.com. ProSport CPA is the leading tax firm in professional sports, serving more than 500 clients in all the major sports leagues. Good luck in your professional career!

Tax Hints for Overseas Pro Basketball Players

Tuesday, December 20th, 2016

You’re facing some big financial decisions and filing taxes needs to be a priority. Some American athletes are playing a dangerous game with the Internal Revenue Service (IRS) by not complying with U.S. tax laws. Others are passing up valuable opportunities to receive refunds from their host countries.

As Americans, no matter where we earn money, we are required to report our worldwide income on our U.S. income tax returns. Additionally, the U.S. Department of Treasury requires Americans to report their foreign bank accounts. Failure to do so can result in fines as much as half the account value.

Certified Public Accountants (CPAs) who are fluent with the international aspects of the tax code can help you navigate the complex rules. They also understand the provisions in the U.S. tax code which provide relief from double taxation for international athletes.

Here are a few tips we give our international basketball clients:

1. Make sure you obtain official foreign earnings statements and paystubs from your team. These forms show what you earned and how much foreign taxes were paid on your behalf (equivalent to U.S. Form W-2). For example, BEFORE you come home after the 2016-17 season, make sure your team provides you with your 2016 annual wage and tax statement. These are usually available by the end of January. For the months played in 2017, be sure to have your last paystub, showing what you earned thus far as well as the taxes paid year-to-date. In early 2018, obtain your 2017 official foreign earnings statement for that part of the season. Always keep each of your paystubs to prove what you earned and the taxes paid.

2. Retain a copy of all your overseas playing contracts. These contracts supplement your wage statements and help to detail what you were supposed to get paid in the respective calendar years.

3. Keep a copy of all receipts for any basketball-related expenses that you incur. This includes things like agent fees, training expenses, sports equipment, and travel costs that you incur as a professional athlete. We provide our clients with a questionnaire that reminds them what expenses are possibly deductible; however, it is easier to track these expenses as they incur during the year, as opposed to having to scour bank and credit card statements to try to identify deductions.

Remember that paying taxes is an obligation of every American. Failing to declare what you earned to the IRS is a form of tax evasion. The penalties can be quite severe, including jail time and hefty fines. Make sure you are in the headlines for your successes on the court and not for being a victim of the IRS global crackdown on people who hide their offshore income or accounts.

For more information or to speak with an experienced tax professional knowledgeable about international taxes for overseas pros, please call us at (804) 557-2648, e-mail TaxPro@ProSportCPA.com, or visit www.ProSportCPA.com. ProSport CPA is the leading tax firm exclusively for professional athletes, serving more than 150 professional basketball players. Good luck with your pro career!

Tax Hints for Canadian Football League (CFL) Players

Tuesday, December 1st, 2015

For Americans playing in the Canadian Football League (“CFL”), along with learning the playbook, absorbing the foreign culture, and taking care of business on the field, filing taxes should be of paramount concern. Some American imports, however, are playing a dangerous game with the United States’ Internal Revenue Service and the Canada Revenue Agency by not complying with tax laws. Others are potentially passing up valuable opportunities to receive refunds.

As Americans, no matter where in the world we earn our money, we are required to report all of our worldwide income on our U.S. income tax returns. There are provisions in the U.S. tax code, such as the foreign earned income exclusion and foreign tax credits, which provide relief from double taxation for international athletes. Navigating these complex rules require the use of qualified tax preparers, such as Certified Public Accountants (“CPA’s”), who are fluent with the international aspects of the tax code.

Here are a few tips for Canadian Football League players:

1. Make sure you obtain your Form T4 from your team. The Canadian Forms T4 and T4A are the foreign equivalent of the U.S. Form W-2, which shows how much you earned and how much Canadian taxes you paid. CFL players usually receive their Forms T4 by early February of the following year. Also, keep your paystubs as further evidence of what you earned and taxes you paid.

2. Retain a copy of all your CFL playing contracts. These contracts supplement your wage statements and help to detail what you were entitled to get paid during the respective season. The tax authorities sometimes request copies of your playing contracts.

3. Keep a copy of all receipts for any football-related expenses that you incur. This includes any agent fees, training expenses, sports equipment, travel costs, etc. that you incur directly-related to your occupation as a professional athlete. We provide our clients with a questionnaire that guides them on what expenses are possibly deductible; however, it is easier to track these expenses as they occur during the year, as opposed to having to scour bank and credit card statements to try to identify deductions.

Remember to keep in mind that taxes are an obligation of every American. Failing to declare what you earned to the Internal Revenue Service and Canada Revenue Agency is a form of tax evasion…and the penalties can be quite severe, including jail time and hefty fines. Make sure you are in the headlines for your successes on the field and not for being a victim of the global crackdown on people who fail to declare their worldwide income.

For more information or to speak with a tax professional, please call us at (804) 557-2648 or visit www.ProSportCPA.com.

BasketballElite Interview with John Karaffa

Monday, June 24th, 2013

BasketballElite caught up with John Karaffa of ProSport CPA at this year’s Portsmouth Invitational Tournament. ProSport CPA provides expert tax, accounting, and financial education services to professional athletes, including over 100 professional basketball players in the NBA, WNBA, and overseas.

For more information or to speak with a financial professional, knowledgeable about taxes for professional athletes, please contact Dr. Karaffa at (804) 363-9684 or visit us at www.ProSportCPA.com.

CLICK HERE FOR VIDEO >>>>> John Karaffa – Super CPA’s Advice for Pro Athletes

Richmond Times-Dispatch Profiles ProSport CPA

Monday, May 27th, 2013

The Richmond Times-Dispatch caught wind of ProSport CPA’s great story and ran a feature article on Memorial Day. Professional athletes, such as Virginia Tech’s Danny Coale who now competes for the Dallas Cowboys, realize the importance of having trusted, quality advisors on their team.

For more information or to speak with a financial professional, knowledgeable about taxes for professional athletes, please contact Dr. Karaffa at (804) 363-9684 or visit us at www.ProSportCPA.com.

http://www.timesdispatch.com/business/investment/article_4f0d8970-e00d-5830-bd6d-4f6ddf72cb96.html

2013-05-27 Richmond Times – ProSport handles accounting needs for pro athletes

Fox News Features ProSport CPA in Article on California’s Tax Hike

Friday, February 1st, 2013

Fox News enlisted the help of ProSport CPA’s founder, Dr. John Karaffa, in a highly-circulated article about California’s income tax rates. The article, Millionaire Athletes Flee States With High Income Taxes by Joshua Rhett Miller, analyzed Phil Mickelson’s recent comments about California’s newly-enacted tax increase on millionaires.

In the article, Dr. Karaffa commented about California being “already a very high tax state and it’s getting to a point where folks have to make a business decision as well as a lifestyle decision.” The Mickelson case helps to bring state taxation issues to the forefront as hot topic for professional athletes. Since taxes are a professional athlete’s largest expense, it is even more important than ever that professional athletes seek out quality, professional Certified Public Accountants to assist them fulfill their tax obligations.

Fox News is the most-watched news channel in the United States with a distribution of over 90 million subscribers.

For more information or to speak with a financial professional, knowledgeable about taxes for professional athletes, please contact Dr. Karaffa at (804) 363-9684 or visit us at www.prosportcpa.com.

http://www.foxnews.com/sports/2013/01/30/federal-state-tax-hikes-could-send-athletes-migrating-to-tax-friendlier-states/

2013-01-30 Fox News Article on California Tax Rate Hike

ProSport CPA’s President, John Karaffa, Named Accountant of the Month by Accounting Today

Friday, December 7th, 2012

Accounting Today magazine named Dr. John Karaffa its Accountant of the Month. The article is available online currently and will appear in the January 2013 edition of the magazine. More can be found by accessing the article online.

Accounting Today is a leading provider of online business news for the tax and accounting community, offering breaking news, in-depth features, insightful editorial analysis, and a host of Web-related resources and services.

For more information or to speak with a tax professional, knowledgeable about international taxes for overseas pros, please call Dr. Karaffa at (804) 363-9684 or visit us at www.prosportcpa.com.

Tax Time Tips for the Pros

Monday, January 9th, 2012

As the New Year is here, it’s time to start accumulating the data you will need to provide to your accountant. Whether you’re a player in the NFL, NBA, MLB, NHL, MLS, WNBA, CFL, racing, boxing, overseas, or other pro sports, you have unique deductions that you can take due to your profession. Some tips to help save you money:

1. Find a qualified, credentialed tax preparer (such as a Certified Public Accountant, “CPA”), who specializes in working with professional athletes.

2. Communicate your situation, ask questions, and be open and honest with your tax professional.

3. Provide as much documentation as you can to your tax pro.

Follow these tips, and you’ll be well on way to saving yourself money. Good luck to you.

For more information or to speak with a tax professional, please call Dr. Karaffa at (804) 363-9684 or visit us at www.prosportcpa.com.

Professional Athlete Deductions Can Provide Substantial Tax Relief

Saturday, February 12th, 2011

With professional athletes facing overall tax rates in excess of 40%, appropriately utilizing all available Internal Revenue Service (IRS) tax deductions is a necessity. Professional athletes face unique costs due to their profession. Fees for agents, trainers, advisors, and union dues are all tax-deductible, as well as many other expenditures that are often overlooked.

The timing of taking certain deductions is also very important and an important element of optimal, effective tax planning. A year-end tax check-up with a tax accountant who specializes with professional athlete taxation is highly recommended.

With the big dollars involved, it is imperative that professional athletes receive all the appropriate credit from deductions that they are due on their taxes.

For more information or to speak with a tax professional, please call Dr. Karaffa at (804) 363-9684 or visit us at www.prosportcpa.com.

Financial Advisors for Pro Athletes Need Top-Notch Accountant Allies

Saturday, January 15th, 2011

Tax laws are ever-changing and complex. For professional athletes, taxes play a huge role and they must be accounted for comprehensive financial plans are being developed. Financial advisors, who work with professional athletes, can grow their businesses by partnering with strong accountants who also specialize in serving this unique niche.

As regulatory agencies and brokerage firms scrutinize financial advisors and limit their dealings with clients, advisors find it more necessary and fruitful to ally themselves with quality accountants. Certified Public Accountants (CPAs) can often offer services that the financial advisor is not allowed or adept to provide to professional athletes.

Accountants, who specialize in providing tax, accounting, and financial education services to professional athletes, can be a valuable member of the team by bolstering the financial advisor’s position with the athlete, acting as a sounding board for ideas, and sharing best practices.

For more information on how to team up successfully or to speak with a tax professional, please call Dr. Karaffa at (804) 363-9684 or visit us at www.prosportcpa.com.