The NBA has created a luxury tax bracket that will affect how high your tax amount can jump to. So how does this affect you? Well, it can potentially save you a lot of money in taxes every year. There are many great ways to take advantage of this and some of those ways include:
Being a very high-priced player. Some say that players earning six figures annually are “rich” and should pay more in taxes. That may not be true, but if you are earning six figures each year then you definitely should be paying attention to the luxury tax rules. If you do your research and are not a high-roller, then you’ll be fine.
Playing overseas. The luxury tax rate for overseas players is still very high, but it isn’t as high as it used to be. There are still very high penalties for tax evasion, so if you can minimize your earnings and pay your taxes accordingly, then you should. You can always use offshore retirement plans or other methods to lower your tax payments each year.
Trading in your home country club. You probably have a condo in a gated community and you’re using this as a second home. Well, since you’re making so much money, why not let your second home earn you even more? Don’t let the tax man know that you’re using this residence for business reasons, but just use it as a getaway for you and your family members. You’ll be able to use the tax rate for this home. After all, who wants to pay taxes twice?
As with anything, there are good and bad options when it comes to earning more from your tax payments. While paying attention to the NBA luxury tax rate is good practice, don’t forget that the rules change regularly. If the government changes the rules, then you might want to wait and see if the new rules apply to your status. In addition, there are always new forms of tax-free gifts and transfers out there. These can be just as advantageous and helpful as the previous ones. Just make sure to read your gift statement and understand what it means before making any type of purchase.
Other things that you’ll want to think about is whether or not the current tax rate will affect your NBA salary. In addition, are there any new rules out there that will impact the types of lodging accommodations that you have available? This includes such things as special deals for staycations at a particular hotel, room rates, dining packages and so forth. Knowing exactly what you’ll be paying in the future can help you determine whether or not it’s worth it to upgrade your current residence.