What Is Self-Employment Tax?
Self-employed individuals are subject to different challenges when it comes to taxes. Staying diligent and keeping accurate records can go a long way in easing the frustration.
When a free-agent professional athlete chooses to switch teams and relocate to a different state and city, the state, and potentially local, taxes may have a huge impact on where they choose to go.
When a free-agent professional athlete chooses to switch teams and relocate to a different state and city, the state, and potentially local, taxes may have a huge impact on where they choose to go. For example, it was rumored that when LeBron James left the Cleveland Cavaliers in 2010 to join The Miami Heat, he chose to go to The Heat over The New York Knicks because top earning New Yorkers were dealing with the highest state and city income taxes in the nation.
Now that LeBron has made the decision to go back to Cleveland, what will the tax implications be? First, let’s go over the basics:
So, how much will LeBron be paying in taxes? Kiplinger estimates that he’ll pay about $1.19 million in state taxes, just on his basketball salary. This does not include the millions of dollars he makes annually through endorsements, or the local taxes paid to Independence and Cleveland, estimated to be about $200,000, split between James and Love.
While James most likely considered the tax implications of moving back to The Cavaliers, it obviously was not a big enough factor to change his decision to go home.
For more information about Ohio Taxes, take a look at this article.
Self-employed individuals are subject to different challenges when it comes to taxes. Staying diligent and keeping accurate records can go a long way in easing the frustration.
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Your filing status is perhaps the most important piece of information when it comes to tax withholding. Learn which filing status applies to you.