Dolphins defensive lineman Ndamukong Suh has some things to say about tax reform and the difficulties of financial management as a pro-athlete.
He told Business Insider this week that massive athlete contracts aren’t always what they seem due to taxes.
“Off of my rookie deal, which I’m not hiding anything, you can go and look at my deal, I had $40 million guaranteed, it was 6 years for $40 [million],” he said. “And you take the $40 million that was guaranteed and you swipe that in half because of taxes.”
Which sounds a little absurd at first, but he broke it down further.
“Uncle Sam, the new tax reform, 37% goes to him. And then you have to factor in, I was in Detroit, so you have to factor in taxes there. So that would be Michigan state taxes and then you have the city of Detroit taxes, which is going to be 1 or 2%. So after you look at the particular piece, I’m probably, if I’m not mistaken, Michigan is at like 4 or 5%, so that’s 42 [% of the deal]. City of Detroit’s 1 or 2[%], so you’ve got 43 [% of the deal], then you throw your agent fees, that’s 45, and then you throw in the concept of inflation, which is another 3[%], that’s 48, and then living expenses, let’s just say that’s 2%, you’re at 50%,” he said.
Suh also suggested that players in more expensive cities — like those in New York or New England — pay even more astronomical rates.
“So when I play in New York, when I play in New England, which is Boston, Massachusetts. I play in Buffalo, New York, I’m getting taxed twice in New York. And I have to allocate taxes for that because they don’t take taxes out of your pay check … And then even when I play New York teams, I’m getting taxed out of New York, but also I’m getting taxed out of New Jersey because I’m technically playing in the state of New Jersey,” he said.
It’s probably safe to say that this guy has brushed up on his tax knowledge. While $40 million is still a massive chunk of money, he raises an important issue. Most NFL players are fresh out of college and lack a general understanding of financial management. Between night life, cars, houses, and other expensive purchases like watches and shoes, it’s pretty easy to blow through a few million dollars before the first season’s even over. Especially if you’re not taking taxes into account.
Maybe Ndamukong Suh should host an offseason financial awareness panel for NFL players.
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