Interesting Interview with Phil Mickelson

[Puck it]

Any argument otherwise just reeks of jealousy.

Spot on!

 

[Geoff]

Using Geoff's Sports Illustrated numbers of Phil's estimated annual earnings of 60,000,000 via endorsements and prize money, NOT investment income, he'd be looking at a tax bill outright of about 24,000,000 - now i'm going to guess that he's got some good accountants and financial planners, so lets say that they get his federal tax bill down to 12,000,000 (20%)-

So Phil's clever accountants manage to hide $12 million of our money.

Geoff ducks and runs

 

[drjeff]

So Phil's clever accountants manage to hide $12 million of our money.

Geoff ducks and runs

If it's a LEGAL "loophole" then it never was OUR money. That's how I look at it.

Whether or not one agrees with the "loophole" that's an entirely different discussion. In the end, if someone's tax return can past the test of IRS scrutiny and not end up with them in trouble for violating some line or two in the millions of pages of the tax code, then I have absolutely no problem with that

 

[Puck it]

If it's a LEGAL "loophole" then it never was OUR money. That's how I look at it.

Whether or not one agrees with the "loophole" that's an entirely different discussion. In the end, if someone's tax return can past the test of IRS scrutiny and not end up with them in trouble for violating some line or two in the millions of pages of the tax code, then I have absolutely no problem with that

Loopholes (IMHO) are not illegal, it just means that you have a good accountant that knows the tax code and exploits it. You also have to have the money. For the normal W2 person, there is not much anymore even charitable contributions requirea receipt for even dropping money in the pot at a church.

 

[Puck it]

Just thought of this in how he may have got to 60% number. If he does endorsements and wins tournaments in other states. He will be taxed by that state to. Correct?

 

[deadheadskier]

Just thought of this in how he may have got to 60% number. If he does endorsements and wins tournaments in other states. He will be taxed by that state to. Correct?

No. I looked it up as for years my brother in law lived in Maine, but worked in Mass. This is what Turbo-tax had for information.

The normal rules for interstate taxation are -
--- you file a non-resident return for the states where you worked but did not live, reporting only the income earned in that state.
--- you file a resident return for the state you live in reporting all of your income, no matter where it was earned. You claim on your home state resident return a credit for taxes paid to other states that you worked in. If the out of state income was from a state without an income tax, you would have no credit.

The result of these rules is that you will pay tax on the income, but only once, and the net result is it will be at the tax rate in the higher tax state

 

[Puck it]

No. I looked it up as for years my brother in law lived in Maine, but worked in Mass. This is what Turbo-tax had for information.

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I was a thought. I also heard that CA gov't is considering an exit tax. That is wrong.

 

[Geoff]

No. I looked it up as for years my brother in law lived in Maine, but worked in Mass. This is what Turbo-tax had for information.

Yep. In the case of Phil Mickelson, he'd pay state income tax in the state where he won the tournament filing a non-resident return and then owe California the difference between what he'd paid to the other state and California's higher rate.

For the little people at lower income levels, nobody monitors it. If I have a business trip to a high tax state, I'm technically supposed to file a non-resident return for those days I work there. If you win a million bucks in a golf tournament, the state wants their cut.