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As reported by ESPN’s Adam Schefter and different media, the Dallas Cowboys and quarterback Dak Prescott have agreed to a four-year, $160 million contract. The deal reportedly comprises a $66 million signing bonus—the very best in NFL historical past—has a assure of $126 million and can pay Prescott on common $42 million a 12 months in the course of the first three years of the deal.
Prescott, 27, is ready to grow to be the NFL’s second-highest paid quarterback after Kansas Metropolis Chiefs QB Patrick Mahomes, who earns $45 million a 12 months.
A Louisiana native who performed his faculty ball at Mississippi State, Prescott can even profit by enjoying in Texas—one in every of 9 states with out an revenue tax on wages. Assuming that Prescott additionally resides in Texas, he tasks to maintain roughly $75.5 million of the $126 million. Our determine displays Prescott paying the very best federal revenue tax charge (37%) on the portion of his revenue that exceeds $518,401 (or, if married submitting collectively, revenue that exceeds $622,051). We additionally consider projected payroll taxes and projected athlete-targeted taxes, aka jock taxes.
The monetary profit to Prescott by enjoying for the Cowboys turns into readily obvious if we evaluate his assured cash after taxes to that of Mahomes. Whereas Mahomes will gross $15.4 million extra in assured wages—$141,428,000 to $126,000,000—he’ll solely greatest Prescott by roughly $243,233 after taxes (assuming Mahomes resides in Kansas Metropolis). Missouri’s state revenue tax is 5.4% and Kansas Metropolis’s native revenue tax is 1%.
To be clear, there is no such thing as a certainty in projecting tax figures, provided that key elements might change over the following 4 years. For example, federal tax legislation might change to extend (or lower) the proportion paid by the nation’s highest revenue earners. Texas tax legislation, similar to the tax and jock tax legal guidelines in different jurisdictions, might additionally change. And, although unlikely, Prescott might be traded to a workforce in a state with an revenue tax. Texas additionally options different taxes that Prescott will face. The state’s gross sales and use tax charge is 6.25% and might rise to as a lot as 8.25% in sure areas of the state.
Nonetheless, Prescott stands to make a fortune, and it will likely be enhanced by enjoying in Texas.
Extra from Sportico.com
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