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For The Love Of Money Top 10 For Entertainers And Athletes

March 26, 2009

Here is an excerpt from my book “For The Love Of Money.”  Enjoy…and leave a comment!

Are you dreaming of “Lights, Camera, Action”?  Before you start to lead “The Glamorous Life” (Sheila E. 1984), make sure to get these tax tips in order.

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    • Track commission amounts paid to agents, accountants, and managers (all deductions), because gross income amounts are reported to IRS.
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    • Make sure to track out-of-state income. They require you to file returns if you work in their state, even if you don’t live there!
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    • The IRS already believes that entertainers and athletes don’t report all of their income and take excessive tax deductions. Protect yourself by keeping all supporting documents to back up your story.
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    • Try to use tax professionals that have experience working with other entertainers/athletes, or seem willing to perform the necessary research. There are special rules just for you!!
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    • If you have an EIN (Employer Identification Number), you HAVE to file quarterly payroll returns, even if you don’t have any payroll expenses.
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    • If you own a side business (i.e., like a corporation) and you take money out of this business, the IRS might consider this a payroll expense and you may owe payroll taxes. Speak with a tax advisor about structuring employee loans if you plan to pay the money back to your corporation within the same tax year.
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    • When thinking about how much bling, bling you want to get, REMEMBER that your actual cash flow is not your contract amount, but the contract amount less agent (10%), manager (15%), business manager (5%), and taxes (20%). Of course your personal percentages may differ, but you get the drift…think 50% is left.
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    • Meet with your accountant/financial advisor to calculate your quarterly tax estimates.
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    • Even if you are not incorporated, if you have a side business, make sure that you have a separate business checking account that is used only for business income and expenses.
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    • For those who think they are sitting under the radar and the IRS does not know that you exist or that you have been working (because you haven’t filed in years), THEY KNOW WHERE YOU ARE!  They read the trades and watch ESPN just like you! Expect them to show up when your BIG deal closes.
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2 Comments leave one →
  1. April 6, 2009 10:30 am

    Where did you get your blog layout from? I’d like to get one like it for my blog.

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