Ever wonder what it’s like for Athletes to pay taxes.
Because the general rule is that income is taxed where it is earned.
For example: Tracy Mcgrady (one of the greatest basketball players of all time – a possible future of Hall of Famer). Think about all the times he had to pay taxes when he especially played for Toronto Raptors:
1. Since Toronto is in Canada – His income had to be withheld in Canada, furthermore he was also subject to tax at national level.
2. He was subject to taxes in Ontario at the provincial level
3. Whenever he played road games in different states in the U.S., he was also subject to state taxes in states where he played/earned income.
4. Finally, he was also subject to taxes at the U.S. Federal level as well.
Other factors to take into considering would be residents/domicile of the athlete. This is why it’s popular for athletes to create domicile/residency in Texas, Florida or one of the other few states that don’t charge state income tax.
The good in all these is that you do get tax credits for taxes paid in other states. But to figure out the credit and filing all these Canadian Tax Returns & U.S. Federal/state forms can get complicated.
Modi CPA is a licensed firm in the state of Texas in The Colony, TX. We are a qualified firm to discuss Domestic and Offshore/Foreign US tax implications regarding Inbound and outbound matters. Do not hesitate to contact our office should you have further questions. Our Phone number is (904)616-5918 and email is RaviModiCPA@gmail.com