Tax Considerations for MLB Free Agents

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Major League Baseball (MLB) free agents should consider the tax consequences of playing for a team located in a high tax state.  Players always go into negotiations with their agent at their side; should they maybe have a tax attorney on their other side?  Tax relief — it’s one of many variables that can be considered when changing teams, but it’s typically fairly low on the list of considerations.  Of course the teams located in states that do not have income taxes are going to flaunt that little benefit as much as possible (i.e., Seattle Mariners).

Due to Obama’s tax increase on salaries above $200,000 and the expiring Bush tax cuts,  taxes will increase for all MLB players beginning January 1, 2013, regardless of the teams they play for.  Thus, many free agents are negotiating for front-loaded deals that pay out as much as possible before the end of the year.  See full article for more information.

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