Senior Honors Theses

Publication Date

Spring 2017

School

School of Business

Major

Accounting; Business: Finance

Keywords

taxation, athletes, jock tax, federal income tax, gross income, adjusted gross income, deductions, income tax liability, state income tax, duty days method, state of residence, income allocation, tax credits, international income tax, federation of tax administrators

Disciplines

Accounting | Finance and Financial Management | Sports Management | Taxation

Abstract

Taxation of income for the average person can be a daunting task. However, for professional athletes, this task becomes even more tedious. Professional athletes face the jock tax. This means that athletes have to pay taxes in every state in which they play a game, practice, and perform a service that is part of their contract. Professional athletes, like every United States (U.S.) citizen, are required to pay both federal and state income taxes. Since professional athletes are constantly traveling, their state of residence becomes even more important when allocating their income to the respective state. Many question the constitutionality of the jock tax. Nonetheless, professional athletes need to strategically plan to maximize their profits, while factoring in the implementations of the jock tax.

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