MLB Draft - Signing Bonus

Ran across some interesting reading regarding signing bonuses. I don't know anything about the authors or their company.

What’s your signing bonus number?
http://athletewealth.com/whats-signing-bonus-number/

How your mlb signing bonus is taxed
http://athletewealth.com/howmlbsigningbonusistaxed/

Will your signing bonus be enough?
http://athletewealth.com/will-...ing-bonus-be-enough/

Understanding your mlb signing bonus paystub
http://athletewealth.com/under...gning-bonus-paystub/

Original Post

Find the accountant before the draft, and let the accountant advise as to how to manage the bonus payment, e.g., lump sum, split over two year and if split over two years, what's the percentage split. The accounting firm should be able to advise as to the best way to structure the payment so that taxes are minimized.

MidAtlanticDad posted:

Ran across some interesting reading regarding signing bonuses. I don't know anything about the authors or their company.

What’s your signing bonus number?
http://athletewealth.com/whats-signing-bonus-number/

How your mlb signing bonus is taxed
http://athletewealth.com/howmlbsigningbonusistaxed/

Will your signing bonus be enough?
http://athletewealth.com/will-...ing-bonus-be-enough/

Understanding your mlb signing bonus paystub
http://athletewealth.com/under...gning-bonus-paystub/

Looks like good initial information, with a slight advertisement .... not sure about the bonus being taxed in the state you play in.

bacdorslider posted:
MidAtlanticDad posted:

Ran across some interesting reading regarding signing bonuses. I don't know anything about the authors or their company.

What’s your signing bonus number?
http://athletewealth.com/whats-signing-bonus-number/

How your mlb signing bonus is taxed
http://athletewealth.com/howmlbsigningbonusistaxed/

Will your signing bonus be enough?
http://athletewealth.com/will-...ing-bonus-be-enough/

Understanding your mlb signing bonus paystub
http://athletewealth.com/under...gning-bonus-paystub/

Looks like good initial information, with a slight advertisement .... not sure about the bonus being taxed in the state you play in.

Excellent!

Dominik85 posted:
4T2 posted:

I would love to have to worry about how it gets taxed...

-42

If you get 2.5M it doesn't really matter but if you are in a spot in between taking a draft bonus and taking a college scholarship taxes can matter and should be considered.

Absolutely, 100% agree. And would love to be in a position to need to make that decision. Sign the pro contract, or take the scholarship? A potentially very difficult decision, yes--but one I'd like to be fretting over. The OP's linked articles are excellent help, and I hope I need to refer to them in a couple years.

-42

bacdorslider posted:
4T2 posted:

I would love to have to worry about how it gets taxed...

-42

I used to think the same thing... but when it happens it's no fun

...or when it is not taxed:  no fun.

Son certainly didn't get a multi-million bonus, but what he did get was not taxed at the state level.  I did a quick calculation, printed off a state tax payment coupon, and had to ask son for a HUGE check to cover state taxes.  He was not pleased.  Oh, to be thrown in to adulthood!  

 

keewart posted:
bacdorslider posted:
4T2 posted:

I would love to have to worry about how it gets taxed...

-42

I used to think the same thing... but when it happens it's no fun

...or when it is not taxed:  no fun.

Son certainly didn't get a multi-million bonus, but what he did get was not taxed at the state level.  I did a quick calculation, printed off a state tax payment coupon, and had to ask son for a HUGE check to cover state taxes.  He was not please.  Oh, to be thrown in to adulthood!  

 

If your son gets in this position deciding where they want to live and become a resident of that state is very important. Can potentially save tens to hundred of thousands $ in state taxes. 

Curious how the process works leading up to the draft.  Son is a college junior, draft eligible this year.  He had a good summer.  Had a scout who was at one game talk to his team about him...had tried to get back to see him again, but schedules didn't work.  This past week, son got a letter from another scout asking for info.  Son  answered everything and returned it.  This scout has known my son for a long time, he's a local guy...and nobody really knows how much pull he has.  Does the info that my son provides go to MLB...or just the team?  Do other teams see that info?  He hasn't heard from the other scout that saw him play this summer, but he is from within a couple hours of us, so son is hoping he'll see him in the spring 

Trust In Him posted:
keewart posted:
bacdorslider posted:
4T2 posted:

I would love to have to worry about how it gets taxed...

-42

I used to think the same thing... but when it happens it's no fun

...or when it is not taxed:  no fun.

Son certainly didn't get a multi-million bonus, but what he did get was not taxed at the state level.  I did a quick calculation, printed off a state tax payment coupon, and had to ask son for a HUGE check to cover state taxes.  He was not please.  Oh, to be thrown in to adulthood!  

 

If your son gets in this position deciding where they want to live and become a resident of that state is very important. Can potentially save tens to hundred of thousands $ in state taxes. 

The parents of a college teammate of my son moved to Florida the summer before his Junior year for this very reason.  No state tax in FL.  They wanted to move anyway and took the opportunity to do it.  Saved their 3rd rounder a ton.

However, my husband and I were not about to uproot, change jobs, etc.  Our family is here.   Son can pay the tax.  Later....if he should get a fat paycheck....he can move anywhere he pleases!   I don't think you can claim residency of one state  while you are a college student in a different state.  Maybe only if your parents move?

Buckeye 2015 posted:

Curious how the process works leading up to the draft.  Son is a college junior, draft eligible this year.  He had a good summer.  Had a scout who was at one game talk to his team about him...had tried to get back to see him again, but schedules didn't work.  This past week, son got a letter from another scout asking for info.  Son  answered everything and returned it.  This scout has known my son for a long time, he's a local guy...and nobody really knows how much pull he has.  Does the info that my son provides go to MLB...or just the team?  Do other teams see that info?  He hasn't heard from the other scout that saw him play this summer, but he is from within a couple hours of us, so son is hoping he'll see him in the spring 

There is not a MLB "clearinghouse" anymore so each team does their own questionnaire.  Some have additional psychological tests.  It bugged me that son got bogged down with them and interviews (very willingly) right at winter exam time.  Of the 30 teams, I think son eventually did 26 team questionnaires.   It can get tedious, especially when medical records and xrays need to be dug up and eye exam dates found, which involved me.    

keewart posted:
Trust In Him posted:
keewart posted:
bacdorslider posted:
4T2 posted:

I would love to have to worry about how it gets taxed...

-42

I used to think the same thing... but when it happens it's no fun

...or when it is not taxed:  no fun.

Son certainly didn't get a multi-million bonus, but what he did get was not taxed at the state level.  I did a quick calculation, printed off a state tax payment coupon, and had to ask son for a HUGE check to cover state taxes.  He was not please.  Oh, to be thrown in to adulthood!  

 

If your son gets in this position deciding where they want to live and become a resident of that state is very important. Can potentially save tens to hundred of thousands $ in state taxes. 

The parents of a college teammate of my son moved to Florida the summer before his Junior year for this very reason.  No state tax in FL.  They wanted to move anyway and took the opportunity to do it.  Saved their 3rd rounder a ton.

However, my husband and I were not about to uproot, change jobs, etc.  Our family is here.   Son can pay the tax.  Later....if he should get a fat paycheck....he can move anywhere he pleases!   I don't think you can claim residency of one state  while you are a college student in a different state.  Maybe only if your parents move?

My understanding is when your jr son gets drafted and decides to turn pro is when he decides where to move to. He will no longer be living with you his parents and all checks, correspondences, bills will be mailed to him there.

keewart posted:
Buckeye 2015 posted:

Curious how the process works leading up to the draft.  Son is a college junior, draft eligible this year.  He had a good summer.  Had a scout who was at one game talk to his team about him...had tried to get back to see him again, but schedules didn't work.  This past week, son got a letter from another scout asking for info.  Son  answered everything and returned it.  This scout has known my son for a long time, he's a local guy...and nobody really knows how much pull he has.  Does the info that my son provides go to MLB...or just the team?  Do other teams see that info?  He hasn't heard from the other scout that saw him play this summer, but he is from within a couple hours of us, so son is hoping he'll see him in the spring 

There is not a MLB "clearinghouse" anymore so each team does their own questionnaire.  Some have additional psychological tests.  It bugged me that son got bogged down with them and interviews (very willingly) right at winter exam time.  Of the 30 teams, I think son eventually did 26 team questionnaires.   It can get tedious, especially when medical records and xrays need to be dug up and eye exam dates found, which involved me.    

My recommendation is to have son keep a binder of all MLB team questionnaires and a summary of all contacts along with scout name and any other info. It will make it easier to remember past meetings and what was discussed. My son filled out info for every team and it came in handy. Scouts will watch practices, pre-game batting, warming up etc.  some will watch from parking structures, hidden spots as well as in the stands. The coaches know the scouts and can relay to your son if a team is interested at the beginning. A few months before the draft it can get pretty intense with contacts and workouts. MLB will send out a questionnaire and request a medical and vision exam. The results and any previous exams from injuries will be forwarded to MLB where all teams have access to. You cannot send specific medical info to certain teams, must be available to all teams. As Keewart mentioned psychological and vision evaluations are conducted mostly during team workouts. Exciting times ahead for your college jr son buckeye. Good luck on the upcoming season. 

4T2 posted:
Dominik85 posted:
4T2 posted:

I would love to have to worry about how it gets taxed...

-42

If you get 2.5M it doesn't really matter but if you are in a spot in between taking a draft bonus and taking a college scholarship taxes can matter and should be considered.

Absolutely, 100% agree. And would love to be in a position to need to make that decision. Sign the pro contract, or take the scholarship? A potentially very difficult decision, yes--but one I'd like to be fretting over. The OP's linked articles are excellent help, and I hope I need to refer to them in a couple years.

-42

My suggestion would be to concentrate on a very nice scholarship so that you and he will have little or no debt.

You can worry about that MLB stuff later. 

You would very much prefer that your son grow up under the leadership and watchful eye of a college coach.

Trust me on that.

Trust In Him posted:
keewart posted:
Buckeye 2015 posted:

Curious how the process works leading up to the draft.  Son is a college junior, draft eligible this year.  He had a good summer.  Had a scout who was at one game talk to his team about him...had tried to get back to see him again, but schedules didn't work.  This past week, son got a letter from another scout asking for info.  Son  answered everything and returned it.  This scout has known my son for a long time, he's a local guy...and nobody really knows how much pull he has.  Does the info that my son provides go to MLB...or just the team?  Do other teams see that info?  He hasn't heard from the other scout that saw him play this summer, but he is from within a couple hours of us, so son is hoping he'll see him in the spring 

There is not a MLB "clearinghouse" anymore so each team does their own questionnaire.  Some have additional psychological tests.  It bugged me that son got bogged down with them and interviews (very willingly) right at winter exam time.  Of the 30 teams, I think son eventually did 26 team questionnaires.   It can get tedious, especially when medical records and xrays need to be dug up and eye exam dates found, which involved me.    

My recommendation is to have son keep a binder of all MLB team questionnaires and a summary of all contacts along with scout name and any other info. It will make it easier to remember past meetings and what was discussed. My son filled out info for every team and it came in handy. Scouts will watch practices, pre-game batting, warming up etc.  some will watch from parking structures, hidden spots as well as in the stands. The coaches know the scouts and can relay to your son if a team is interested at the beginning. A few months before the draft it can get pretty intense with contacts and workouts. MLB will send out a questionnaire and request a medical and vision exam. The results and any previous exams from injuries will be forwarded to MLB where all teams have access to. You cannot send specific medical info to certain teams, must be available to all teams. As Keewart mentioned psychological and vision evaluations are conducted mostly during team workouts. Exciting times ahead for your college jr son buckeye. Good luck on the upcoming season. 

"You cannot send specific medical info to certain teams, must be available to all teams."

My son was recently asked by a scout to send xrays, is that a no-no?

"My son was recently asked by a scout to send xrays, is that a no-no?"

My son had surgery on both hips the summer between freshman and sophomore years of college.  Son is home right now so I asked him:

The teams that requested the medical info directly to son, he sent directly to them.

The scouting bureau (around 7 teams use this?) asked the trainer at his college and the trainer got the records to the bureau.  Son just signed some release papers.

As it gets closer to the draft, the top 200 will will be notified that they need an eye exam and a urine test.  *****If your son is in this group, the urine test WILL pick up stuff that could eliminate him.  By declining the test, it essentially takes your son out of the draft.*****  Stay clean, my friends.

Add Reply

Likes (0)
×
×
×
×