Lebron James made his decision this week to take his talent to South Beach and play next season for the Miami Heat. It shocked many fans in New York and especially in his hometown of Cleavland. James said that it was the best decision for himself and his family. He is right, especially when it comes to the issue of state income taxes.
Consider these numbers:
LeBron makes about $30 million a year. Roughly $17 million from the NBA & nearly $13 million from his athletic shoe endoresements from Nike. According to the Ohio State Department of Taxation website, someone earning as much as Lebron would pay a flat tax of $9573.30 plus 6.24% of any earnings in excess of $200k a year to the state of Ohio. Lets assume that he is just being taxed on his earnings from the Cavaliers. $17 million x 6.24% = $1,060,800 + the $9573.30 = $1,070,373.80 that he would owe in state taxes to Ohio next year. If you add in his Nike contract the amount goes to nearly $2 million. By playing in Florida next year, where they have no state income taxes, Lebron saves himself at least a million dollars, but most likely closer to $2 million. How is that for tax planning.....I hope that is enough for him pay for his relocation to Miami. I think he'll be able to get by.
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