October 20, 2020
As a professional athlete, your everyday routine is most likely filled with different tasks and processes that help you become the best version of yourself.
Right now, you most likely train at least twice a day, do three or four recovery sessions weekly, and spend time eating multiple times a day until you don’t have time for anything else. Considering any nightly research and planning, you leave yourself with only a few weekends a year to reap what you sow.
Considering how packed your routine is, it’s easy to say that you probably don’t want to concern yourself with anything else because there won’t be enough time to handle it all. Although there is nearly nothing that you could make an exception for in your routine, there’s one aspect that you most likely aren’t handling as expected: Your finances.
Why it matters to protect your finances with proper accounting
Compared to your high school varsity and summer league days, being a pro in the big leagues means dealing with even more money. While it’s a dream for anyone to be paid to do what they love, seeing the situation you’re in now also requires you to be more responsible with your finances.
If you don’t want to end up like the other sob stories of negligent college start athletes who blew their first six or seven-figure paycheck, you’ll need to whip your financial habits into shape. By taking the time to handle your accounting and other financial responsibilities right the first time, you can immediately set yourself up for stable wealth!
A few key accounting terms you need to know about
Sure, it might sound complicated and intimidating at first, but knowing how to manage your accounting and money the right way properly is a relatively simple task, especially if you know the right steps. Thankfully, a good set of financial habits, much like technique or reflexes, can be cultivated and refined with as little as a bit of awareness and more practice!
To ensure that you don’t get caught up while learning how to manage the large sum of money you’re getting, here are three crucial accounting concepts to get acquainted with:
Concept #1: Jock tax
For professional athletes in America, the obligation and responsibility of paying Jock Tax is a commitment that cannot be overlooked. Sadly, most athletes—both new and seasoned—still end up forgetting to handle this specific accounting concept and risk incurring various penalties.
Generally, the Jock Tax law entails reporting the income you make as an athlete in the state you play. However, the idea of dealing with this specific aspect of athlete accounting also requires taking any player trades, which will bring about other challenges for a tax planning process!
Concept #2: Agent fees
Although the expenses may differ depending on the sport itself and the type of partnership, agent fees are another crucial consideration to value when going over your accounting. Although the IRS declared agent fees as cost items that no longer qualify as an itemized deduction, they still take up quite a bit of importance because they require extra declarations.
Concept #3: Athletic equipment
Aside from being an essential aspect of your athletic performance, athletic equipment also plays a critical role in your accounting in terms of costs. Unfortunately, the gloves, bats, sticks, cleats, weights, and other equipment you work with are no longer classified as itemized deductions. Nevertheless, it’s worth noting that our experts can help you take advantage of favorable tax provisions relating to your tools of the trade so that you can save more money!
Conclusion
As an athlete, one of the toughest challenges you’ll ever face throughout your career is getting a grip on your finances and doing all you can to keep everything in line. Thankfully, keeping track of the three essential concepts of your financial records and the other items you’ll need to handle during filing season will help you stay sharp on and off the field of play!
We're one of the top professional athlete accounting firms in Fort Lauderdale, FL, that's guaranteed to accommodate any client with an ample amount of service. If you want to find a service provider who has your best interest and financial growth in mind as you embark on your professional career, get in touch with us today to see how we can help!
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