Cardinal Players in for Big Post Season Bonuses; Some Players Will Also Get Big Tax Bills
So what was playing in the Post Season really worth to the Cardinal players? Boston Red Sox players receive $307,323 each, a full share for winning the World Series, while the runner up St. Louis Cardinals receive a bonus of $228,300 each, according to The St. Louis Business Journal’s morning’s edition.
Now how does this bonus affect the player’s income taxes? For top Cardinal earners like Matt Holliday, Yadier Molina, and Adam Wainwright making at least $12 million, this bonus may be small potatoes and has a rather small impact on their overall tax scenario.
However, for younger players making near the league minimum of $490,000, this bonus is almost half a year’s pay! A 47% bonus is a big deal and these athletes could now be taxed at the highest rates. As a result they could also face additional Medicare tax on wages, and an increased rate on capital gains and dividends, not to mention the phase out of personal exemptions and itemized deductions at these income levels.
Athletes or anyone new to big pay days may find these general concepts confusing. Don’t worry, it’s not too late. As the end of the 2013 tax year draws near, consider year end planning strategies with a professional tax advisor to help avoid unexpected tax situations in April 2014 and so that tax season doesn’t interfere with your next big season.
For more information on the 2013 bonuses as compared to other years, see the complete Business Journal story .