professional sports players pay tax?

Question

i heard professional sports players pay 50% taxes. if true, what "rule" says this? is it the same with lottery winners?

Answer 1

Most are probably in the 35% Federal bracket. That is the highest Federal income tax rate at this time. If you add state income tax, it may come to around 50%. Being a baseball player is NOT a factor. The level of income and any deductions not wiped out by the ATM determine how much tax they owe.

Answer 2

Let assume that a professional sports player earns his money in states with an average rate of 5% income tax.

Let also assume that they've already paid tax on the first say 500k of income.

on the next dollar the sportsplayer, or anyone for that matter will pay 36% in federal tax and 5% in state tax. They will also pay 1.45% in medicare.

Their marginal tax rate is 42.45%. If they earn a modest amount their average rate will be much lower.

However Arod is getting 25 mil a year his average rate will come out to somewhere around 40% not quite 50% but high.

Also lottery winners won't pay medicare.

Answer 3

Rules for professional sports players are the same as for anyone else, including lottery winners.

Answer 4

Thats just someones rough estimation of what sports players pay in taxes. They are subject to taxes similar to other business. They are required to pay taxes in each state where they play a game, based on what they earned for that game. ( ie Texas rangers players pay New York tax on their earnings for games in New York)

Answer 5

And to further complicate things, I suspect that each state in which the player plays a game will tax a piece of the player's income because he "earned" it in that state.

Talk about a complicated return!!

Answer 6

dont forget local taxes as well. city tax, county tax, school tax

Answer 7

yes, you have to claim all lotto wins on your 1030 at the end of the year...