You could pull the Wiggans deduction -- promise Froome the prize money, then never pay up.

Seriously, many of those guys reside Monaco, and avoid paying taxes altogether.

Pretty sure there are all independent contractors, so maybe those payments to others could be counted as expenses?
Their taxes must be a real pain - earning in so many countries and such.
A college friend played in the NBA for about ten years and had to file many tax returns. Income was mostly counted by where the state where games were played. And, some cities even have income tax.

Dr Ferrari and others will take care of this for you if you earn enough to afford them

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el cabrero
Pure American Naturals
http://www.pureamericannaturals.com/
https://www.facebook.com/PureAmericanNaturals/

Poor guy.

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--Chris

Prizes are always included in income, but the other riders might be able to exclude it as a §102 gift.

(Taking federal income tax this semester. lol)

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@floathammerholdon | @partners_in_tri

Funny part is that your comment actually rings true to about 60% of the NBA. 60% go broke within a few years of leaving league. I think in NFL it was 78% from 2010 study.

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Brooks Doughtie, M.S.
Exercise Physiology
-USAT Level II

I always wondered this as well, and even for pro triathletes. I assume there isn't a regular T4 (Canada) or W2, but maybe if they receive a separate $ amount annually from a sponsor that would be reported that way. As far as prize money i was wondered how it would be reported and taxed. Seems like it would just be adding insult to injury for most pro triathletes to get taxed on winnings?

Great topic!

In the US athletes pay state and local income taxes based on where they earn their income, not just based on where they live. For example, if you play for the Cleveland Indians, you have to pay income tax to Michigan and the City of Detroit for the proportionate share of your salary earned at the away games you play against the Tigers. I'd assume it is the same in Europe, so my guess if you win 500,000 euro in France, you have to pay French income taxes on that even if you live in Monaco.

As for kicking some to your teammates, I'd assume you could write that off if you send them 1099's ;-)

Of course we get taxed on winnings, that is income. the insulting part is that often times the amount is so small, $500 and less and yet they without hold state taxes as well as federal. California does this. The interesting thing is that I have had a few tax questions earlier on and reached out to some other pros. Every single pro I talked (some really big names in there) said either their dad or mom did their taxes. I couldn't be believe it. I have given up trying to talk to any pro triathletes about taxes. They are clearly too busy doing other things.

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The prize money in pro cycling is first paid by the race organizers to the national federation of the riders earning it. I believe it is then distributed to the teams who then distribute it on to the riders. The split of the prize money would be made before the 'winning' rider receives anything so I would think he would only be taxed on the net amount that he receives and not what he 'earned' by winning a particular race.

Yeah, I know. But most of his career he earned the minimum. (Yeah, $400k to $1 million ain't bad) He did get a ring, and then a coach of the year award. Pretty sure he makes more now as a coach than he did per year as a player. So, he probably has the same tax problems.

Is this for national teams, or trade teams? It would seem odd to pay a national federation for earnings of a trade team of many different nationalities.

A few things I've always wondered....

If one wins an Ironman or 70.3 or any race for that matter and say the winner gets 25k, is the prize money check 25k? Or are some taxes already taken out? If any taxes are already taken out before the check arrives, I would expect it to be only state taxes (you would have to claim federal on your own). Do you also get a letter saying the winnings/earnings have been reported/sent to the IRS?

This stuff really fascinates me. Not that I'm going to be winning any money in this sport ever in my lifetime.

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blog

Oh Really? Tell that to Tom Boonen
http://www.cyclingnews.com/news/boonen-pays-two-million-euros-in-belgian-tax-case/

Yes the winner get a 1099 from WTC at the end of the year. We all do. The only time I won money internationally was a small sum of $500 for 8th at Ironman Mont Tremblant. I can't remember what they took out, but I only got about $400 if IRRC. But to my knowledge the races are supposed to withhold something like 30% from international athletes. Whether they do or not I do not know as I haven't really talked about it with those OUS athletes.

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For trade teams, yes. All prize money is first paid to the national federations and distributed from there. And it can take a while for the money to finally end up in the pockets of the riders who earned it.

I am sure that most of the income he was hiding was his salary and what would be large endorsement income due to his super-stardom in Belgium.

David Millar covered it in his first book (probably in too much detail). It sounds very confusing, especially for young men with little education.

FWIW, I actually saw a couple month's worth of a major league baseball player's pay checks once (long story but he actually left them behind at a house he was renting). It was a real paycheck, probably the same as the concession workers got from the team - the direct deposit "check" and the stub with all the normal tax withholding, etc. He even got little Per Diem for food for road games. It just took a few seconds to realize after looking at a couple of them that the $50K before withholding was being paid weekly . . . . .