HFBoards

Go Back   HFBoards > NHL Eastern Conference > Atlantic Division > Ottawa Senators
Mobile Hockey's Future Become a Sponsor Site Rules Support Forum vBookie Page 2
Notices

Understanding Taxes and the NHL

Reply
 
Thread Tools
Old
07-01-2012, 06:48 PM
  #1
MainDotC
Depth Defenceman
 
MainDotC's Avatar
 
Join Date: Apr 2007
Location: Morrisville, NY
Country: United States
Posts: 17,281
vCash: 500
Send a message via AIM to MainDotC Send a message via Yahoo to MainDotC Send a message via Skype™ to MainDotC
Understanding Taxes and the NHL

This applies to all players but I was discussing the Carkner deal with someone and he thought the 750K offer by Ottawa was insulting. I started to think about the costs of staying in Ottawa versus moving to the island.

If he finds a nice one-bedroom in NYC or LI then I'll say he's going to put up about 1K - 2K a year...not sure what type of guy Carkner is in types of spending...I'm assuming due to his status he's not the kind to go out and buy a Lamborghini like Bure. In fact, I thought the apartment for the NYR x-mas party where Boyle got drunk was rather quaint and would be a good fit. So 2K? Maybe 5 on the high end depending on the neighborhood? I'm assuming he's not going to move his family down there.

For three years that's, possibly, 72K - 180K. I'm not sure what they pay in other expenditures like if they have medical insurance but I'll figure 200K on the low end, 600K max (over three years).

Now I got into taxes...I found this article about the NHL and taxes - couldn't find a date:

Quote:
Originally Posted by http://www.bankrate.com/finance/taxes/taxes-cost-professional-athlete.aspx
The tax treaty between the United States and Canada preventing double taxation for those who cross the border for work can complicate tax planning for Canadian-based NBA, NHL and MLB players. (There are no NFL teams north of the border.)

This is because Canada's top tax rate of 48 percent is 13 percent higher than the U.S. maximum (35 percent), and Canada taxes individuals based on their residency while the U.S. taxes people based on citizenship.

"As a result, it's advantageous for Canadian players to move to the U.S.," says Losi. "That's what a lot of the NHL guys do. As long as you don't have Canadian-source income, you don't pay Canadian tax, you save 13 percent on every dollar, plus there are a lot more deductions and credits in the U.S."

While the reverse is often true for U.S. players signed to Canadian teams, Raiola sees a solution to help even out the tax discrepancy.

"Get a signing bonus from a Canadian team, which under the treaty is only taxed at 15 percent," he says. "Canada withholds 15 percent, you get a full credit, pay the 20 percent down here, and you're not penalized for playing for a Canadian-based team."
So since he signed a contract in the u.s. that's 35%? Not sure what the "13 percent on every dollar" bit means. 35% of 4.5 mil is 1.575 mil. So over three years he's losing 1.575M in taxes, then possibly 600K in expenses, so he's left with 2.325M over the course of 3 years.

If this article is correct about canadian taxes, let's examine the possibility. 360K in taxes, maybe very little in living expenses but say 100K over a year if he has a mortgage and such. So he's left with 290K for 1 year.

Not questioning that he got the better deal signing in long island, but are those tax rates correct? Is that something easily answered or does it vary depending on the player and how good their CPA is?

MainDotC is offline   Reply With Quote
Old
07-01-2012, 06:55 PM
  #2
sens2k9
Registered User
 
sens2k9's Avatar
 
Join Date: Aug 2008
Posts: 1,026
vCash: 500
Quote:
Originally Posted by MaindotC View Post
This applies to all players but I was discussing the Carkner deal with someone and he thought the 750K offer by Ottawa was insulting. I started to think about the costs of staying in Ottawa versus moving to the island.

If he finds a nice one-bedroom in NYC or LI then I'll say he's going to put up about 1K - 2K a year...not sure what type of guy Carkner is in types of spending...I'm assuming due to his status he's not the kind to go out and buy a Lamborghini like Bure. In fact, I thought the apartment for the NYR x-mas party where Boyle got drunk was rather quaint and would be a good fit. So 2K? Maybe 5 on the high end depending on the neighborhood? I'm assuming he's not going to move his family down there.

For three years that's, possibly, 72K - 180K. I'm not sure what they pay in other expenditures like if they have medical insurance but I'll figure 200K on the low end, 600K max (over three years).

Now I got into taxes...I found this article about the NHL and taxes - couldn't find a date:



So since he signed a contract in the u.s. that's 35%? Not sure what the "13 percent on every dollar" bit means. 35% of 4.5 mil is 1.575 mil. So over three years he's losing 1.575M in taxes, then possibly 600K in expenses, so he's left with 2.325M over the course of 3 years.

If this article is correct about canadian taxes, let's examine the possibility. 360K in taxes, maybe very little in living expenses but say 100K over a year if he has a mortgage and such. So he's left with 290K for 1 year.

Not questioning that he got the better deal signing in long island, but are those tax rates correct? Is that something easily answered or does it vary depending on the player and how good their CPA is?
Short answer: Canada screws everybody when it comes to taxes

there is no long answer.

(but i did see Colorado's income tax is capped at 4.7%. so P.A. Parenteau making $4mil in colorado is roughly equivalent to 7.5mil/yr in Ottawa.)

sens2k9 is offline   Reply With Quote
Old
07-01-2012, 08:14 PM
  #3
Dick Whitman
Registered User
 
Dick Whitman's Avatar
 
Join Date: Feb 2008
Country: Canada
Posts: 4,468
vCash: 500
New York State has some of the highest tax rates in the States.

Secondly, if he's renting a decent apartment in Manhattan, which is where I assume he'd live rather than Long Island, he's probably looking at 10-15k a month for someone of his stature. Or maybe he'll live outside of the city and commute a fair amount, who knows.

For 3 years, I'd expect him to uproot his family to the states, so who knows what kind of place he'd get.

He'll see more of his paycheque playing in the states but I think if Ottawa offered him the same deal, he'd be a Senator right now. Canada and the States may be neighbours but there is a definite culture shock in living south of the border for most Canadians.

Dick Whitman is offline   Reply With Quote
Old
07-01-2012, 08:14 PM
  #4
Kickabrat
WHAT - ME WORRY?
 
Kickabrat's Avatar
 
Join Date: Jul 2004
Location: Ottawa
Country: Canada
Posts: 3,920
vCash: 500
Quote:
Originally Posted by sens2k9 View Post
Short answer: Canada screws everybody when it comes to taxes

there is no long answer.

(but i did see Colorado's income tax is capped at 4.7%. so P.A. Parenteau making $4mil in colorado is roughly equivalent to 7.5mil/yr in Ottawa.)
Some states have 0%...it's the federal tax rate in the US that matters more. Anyway it's not where he works that counts it's where his permanent residence is, that will determine how much tax he pays.

Kickabrat is offline   Reply With Quote
Old
07-01-2012, 08:15 PM
  #5
Dick Whitman
Registered User
 
Dick Whitman's Avatar
 
Join Date: Feb 2008
Country: Canada
Posts: 4,468
vCash: 500
Quote:
Originally Posted by sens2k9 View Post
Short answer: Canada screws everybody when it comes to taxes

there is no long answer.

(but i did see Colorado's income tax is capped at 4.7%. so P.A. Parenteau making $4mil in colorado is roughly equivalent to 7.5mil/yr in Ottawa.)
Canada screws everybody when it comes to taxes? That's the primary reason we have one of the highest qualities of living on earth.

Dick Whitman is offline   Reply With Quote
Old
07-01-2012, 09:10 PM
  #6
MainDotC
Depth Defenceman
 
MainDotC's Avatar
 
Join Date: Apr 2007
Location: Morrisville, NY
Country: United States
Posts: 17,281
vCash: 500
Send a message via AIM to MainDotC Send a message via Yahoo to MainDotC Send a message via Skype™ to MainDotC
Quote:
Originally Posted by Dick Whitman View Post
New York State has some of the highest tax rates in the States.
No argument here.

Quote:
Secondly, if he's renting a decent apartment in Manhattan, which is where I assume he'd live rather than Long Island, he's probably looking at 10-15k a month for someone of his stature. Or maybe he'll live outside of the city and commute a fair amount, who knows.

For 3 years, I'd expect him to uproot his family to the states, so who knows what kind of place he'd get.

He'll see more of his paycheque playing in the states but I think if Ottawa offered him the same deal, he'd be a Senator right now. Canada and the States may be neighbours but there is a definite culture shock in living south of the border for most Canadians.
If he does take an apt in Manhattan that's really going to cut into his paycheque...I hope he does not do that unless he's getting other incentives. 1.5 M / season is not that much which is why I was trying to figure the tax rates. I didn't even think about NYS tax in conjunction w/ federal!

MainDotC is offline   Reply With Quote
Old
07-02-2012, 06:24 PM
  #7
ColinM
Registered User
 
ColinM's Avatar
 
Join Date: Dec 2004
Location: Halifax
Country: Canada
Posts: 323
vCash: 500
I wonder if one can put a price on one's privacy. Does it cost extra in Ottawa to go out to eat in Ottawa if you have to avoid other people, the way you wouldn't in New York.

ColinM is offline   Reply With Quote
Reply

Forum Jump


Bookmarks

Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off



All times are GMT -5. The time now is 02:02 PM.

monitoring_string = "e4251c93e2ba248d29da988d93bf5144"
Contact Us - HFBoards - Archive - Privacy Statement - Terms of Use - Advertise - Top - AdChoices

vBulletin Copyright ©2000 - 2015, Jelsoft Enterprises Ltd.
HFBoards.com is a property of CraveOnline Media, LLC, an Evolve Media, LLC company. 2015 All Rights Reserved.