• Live streamers are evolving into powerful digital brands, and managing your growth like a business is essential for long-term success.

• To stay financially healthy, you need to separate personal and business finances, track all income sources, and budget for quarterly taxes and year-end planning.

• Having professional support can help you make smarter decisions, handle unpredictable income, and turn short-term wins into sustainable growth.

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Live streaming is more than a trend — it’s a movement. Platforms like Twitch, YouTube Live, Instagram Live, and TikTok are turning everyday creators into digital stars by allowing real-time interaction with fans. And thanks to the ability to repurpose and share live content across multiple platforms, your audience isn’t just watching — they’re building a relationship with you.

That connection is powerful. Whether you’re streaming gameplay, makeup tutorials, or experiences in haunted houses, live streaming is reshaping how audiences engage with content. But, as your following grows, your responsibilities grow with it. You’re not just entertaining anymore — you’re building a brand. So how do you make the most of your momentum?

3 Questions Every Live Streamer Should Be Asking

If you’re serious about turning your streaming success into a real business, these are the questions that can shape your future — creatively and financially:

1. How Can I Monetize My Content and Grow My Business?

You’ve got the audience — now it’s time to turn your stream into a business. The good news is, you’re not waiting for a record deal or TV contract. You have direct access to revenue streams like ad revenue, subscriptions, sponsorships, merch, and even licensing deals. That gives you full control — but also full responsibility.

Growth doesn’t just mean more followers — it means building a sustainable business. That starts with thinking like a brand. Top streamers are forming business entities, tracking income and expenses, and hiring teams to handle editing, scheduling, and outreach. And they’re diversifying beyond just one platform — because relying on an algorithm is risky. Building direct-to-audience channels like newsletters or merch stores can create more stable income streams and reduce platform dependence.

Learn more about how you can take control of monetization.

2. What Am I Missing When It Comes to Taxes and Accounting?

If you’re earning money from your content, you’re running a business — and that means you likely owe taxes, whether you’re aware of them or not. It’s helpful to track expenses and delineate between your business and personal finances. Use dedicated accounts for income, expenses, taxes, and savings. By doing this, it keeps things cleaner for tax reporting and helps you see the full picture in an organized way.

Also, keep detailed records. That includes ad revenue, sponsorships, “gifts” from brands (which are often taxable), merch income, and even crypto or NFTs. Many creators miss out on valuable deductions for equipment, software, and home office use — all of which can reduce your tax bill. And don’t forget to plan (or save) for tax payments. In certain cases, you may need to pay the IRS quarterly or during year-end planning. A sudden spike in income without proper planning could mean trouble down the road.

Get 10 vital tax and accounting tips every creator need to know.

3. Do I Need a Business Manager?

The moment your income becomes unpredictable, inconsistent, or complicated — it’s time to bring in help. A business manager acts as your personal CFO, handling everything from bill payments and budgeting to tax planning, investment vetting, and estate strategy. They free you up to focus on creating while managing the financial foundation of your career.

It’s not just about managing success — it’s about preparing for what’s next. Business managers help smooth out income peaks and valleys, forecast future needs, and protect against costly mistakes. Whether it’s helping you avoid a bad investment, forming a business entity, or simply translating what your earnings really mean after fees and taxes — they’re there to protect your interests. Bringing one on early in your journey can help you build good financial habits from the start.

Find out why every entertainer needs a business manager.

Turn Your Streams Into a Sustainable Business

You’re not just creating content, you’re running a business. That means thinking beyond daily views and focusing on long-term goals. Whether you’re looking to increase revenue, navigate taxes, or plan for the future, our dedicated Entertainment, Sports, and Media team provides the financial guidance you need. Reach out to our team today to find out how we can help you take your business to the next level.

The post Live Streamers: Are You Managing Your Business Like a Pro? appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• Implementing basic accounting practices and understanding tax implications can help individuals working independently in creative fields gain clarity, meet obligations, and maximize income.

• Separating business and personal finances, tracking income and expenses, and budgeting for estimated taxes can help creators be proactive in their financial planning.

• Creators earning income across state lines or internationally need to be aware of varying taxation requirements in different jurisdictions.

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Today’s creators need to view themselves as both businesses and creatives. Whether you are a YouTuber, Instagrammer, painter, digital artist, photographer, website designer, or any type of artist or influencer, understanding and managing your financial obligations is a crucial aspect of sustaining a thriving career.

Here are 10 tips to help you meet your tax reporting responsibilities and get the most from your hard-earned income:

1. Separate Your Finances

To make your accounting more efficient and streamline the tax-filing process, it is a smart idea to separate your business and personal finances. Designate a dedicated business account to track income and expenses related to your artistic endeavors. This separation not only simplifies tax reporting but also enhances financial clarity, making it easier to assess the overall health of your creative enterprise.

Tip: Establish a separate account for business transactions, or multiple business accounts to allocate money for categories such as expenses, taxes, and savings.

2. Record All Transactions

Sometimes it can be challenging to determine what constitutes income. That’s why it’s important to track everything. Gifts received by sponsors are often taxable, especially if they are products in exchange for services (e.g., promotion of product). “Donations” from various fundraising activities like Kickstarter are also considered revenue. On the other hand, crypto and non-fungible tokens (NFTs) are considered property. Selling them usually generates a capital gain or loss.

Tip: Log all payments and gifts received, even if you are unsure, so your tax preparer can report appropriately.

3. Track Your Expenses

Creators and artists can benefit from various tax deductions tailored to their industry. Deductible expenses may include art supplies, equipment, software subscriptions, professional development, and even a portion of your home used as a dedicated workspace. While expenses should not be excessive, any “ordinary and necessary” expenses of your craft can be deducted.

Tip: Save receipts and track expenses in real-time using a spreadsheet, app, or software for easy recording and reporting.

4. Consider Forming an Entity

Creators who run their own business are often independent contractors. Consider setting up an entity for the business — which can help protect your personal assets from your business assets and offer tax savings. S corporations and LLCs are common for smaller businesses. For larger businesses where investors are coming in, C corporation may make sense.

Tip: Do some research or talk to a tax professional to find out if setting up an entity makes business and financial sense for you.

5. Explore Credits You May Be Eligible For

Artists also may be eligible for various tax credits that can help offset their tax liability. Research and development (R&D) credits can be applicable to certain creative processes, rewarding innovation in your artistic pursuits. For instance, software development is considered to be R&D for income tax purposes.

Tip: Consult a tax professional about ways to maximize credits and minimize your tax liability. 

6. Don’t Overlook State and Local Taxes (SALT)  

Beyond federal taxes, SALT significantly impact overall tax liability. When selling art or merch online (whether physical or digital), be mindful of sales tax requirements, which are determined by local laws. Whether revenue is from “tangible” versus “intangible” products (physical objects versus services, ideas, software, etc.) can dictate where taxation occurs — affecting if your income is subject to sales tax or not.

Tip: Stay informed about varying tax rates, and be cautious of sales and use tax implications tied to transmitting creative art across state lines.

7. Plan for Estimated Taxes

As an independent contractor with variable income streams, you should plan for estimated taxes to avoid financial surprises. These quarterly payments encompass income taxes on your profits plus the self-employment tax (covering Social Security and Medicare). For those earning up to $160,200 in net income, the self-employment tax rate currently stands at 15.3%. The silver lining is that you can deduct half of this self-employment tax when filing your income taxes.

Tip: Set aside a portion of your income for estimated tax payments, ensuring proactive financial planning throughout the year.

8. Report Global Income and Claim Foreign Tax Credits

United States (U.S.) citizens or residents earning abroad must report all worldwide income to the Internal Revenue Service (IRS). If you’re earning income in or from foreign countries, it’s crucial to understand foreign tax credits, filing requirements, and deductibility in various jurisdictions. Every tax jurisdiction may have a different method to tax your creation; and different tax implications may arise based on where brands and intellectual property are created and protected.

Tip: Work with a tax professional to evaluate the potential benefits of foreign tax credits for non-U.S. income.

9. Learn Your Options for Transferring Wealth

Digital assets such as domain names, electronically stored photos, and videos to email and social media accounts all have value. When transferring these as gifts or bequests, there may be tax implications that can be circumvented if the transfer is appropriately structured or organized.

Tip: Consider trusts and estate planning for more tax-efficient wealth transfer.

10. Adapt a Business Owner Mindset

As a creator, embracing a business owner’s perspective is essential for long-term success. Understanding basic financial statements like balance sheets and profit and loss (P&L) statements allows you to gauge profitability, identify your most valuable revenue sources, and streamline your efforts. Elevating your financial literacy empowers you to make more informed decisions — which can lead to greater freedom and flexibility in your career.

Quick Tip: Learn to read a balance sheet and create a basic P&L statement for a clearer financial picture.

Integrate Financial Management into Your Creative Journey  

Effective financial planning is like a great work of art — every brushstroke matters. By taking these steps today you can better position yourself to continue pursuing your creative passion tomorrow.

Need a hand with taxes and accounting for your creative venture? Our Entertainment, Sports, and Media practice works with a diverse range of artists and creators — from musicians and photographers to YouTubers and influencers — and our International Tax and State and Local Tax teams can provide guidance to help you address areas like sales tax or foreign tax credits. Reach out to MGO today.

This article was originally created in collaboration with HUG, a global community for artists and art lovers.

The post 10 Tax and Accounting Tips Every Creator Needs to Know appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• Professional athletes need a comprehensive financial team — including business managers, accountants, tax specialists, and consultants — to manage their complex financial lives.

• Your financial front office provides critical visibility into your finances, prevents potential problems before they arise, and creates a coordinated strategy across all aspects of your wealth management.

• While you may only interact with one or two people on your financial team, there should be an entire network of professionals working behind the scenes to protect your wealth and secure your future.

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Behind every winning team in pro-sports is a strong front office. From the general manager to the scouts, trainers, and analysts, each person plays a critical role in a team’s success. But what about your personal financial team? As a professional athlete, you need an equally robust front office of your own to manage your finances and secure your future.

The Game Changes When the Checks Get Bigger

When you sign that first contract, everything changes. Suddenly, you may be dealing with more money than you’ve ever seen before. You’re getting big paychecks coming in, but also big expenses going out — including taxes, which nobody likes to think about.

It’s a common misconception to think: “I make a million dollars, so I can spend a million dollars.” In reality, that million might actually be $600,000 or less after taxes. Without proper financial management, you can quickly find yourself in trouble.

Your Financial Front Office Lineup

Just as you wouldn’t play without a complete team on the field, you shouldn’t manage your finances without a complete financial team. Here’s who should be in your financial front office:

Business Manager

Think of your business manager as the quarterback or point guard of your financial team. They coordinate everything and serve as your primary point of contact. They handle:

• Bill payments and expense management

• Budgeting and financial projections

• Cash flow analysis

• Personal CFO services

• Coordination with other financial professionals

Your business manager is the person you go to for everything financial. They provide a “seamless experience” by coordinating with all the other specialists working on your behalf.

Accounting Team

Behind the scenes, you need strong accountants who specialize in providing visibility into your financial world. These professionals handle:

• Consolidated financial statements for both personal and business accounts

• Monthly cash flow reporting

• Real-time financial visibility

• Tracking all financial activity across your accounts

The accounting team picks up all the activity in your financial universe — the salaries coming in, all the expenses going out on your credit cards, bank accounts, brokerage accounts, etc. — making sure that it’s all captured in one place.

This financial visibility is crucial. You receive comprehensive reports showing exactly where your money is coming from and where it’s going. This real-time tracking allows you to make adjustments before problems arise.

Tax Team

Tax planning is critical for professional athletes. Your tax team handles:

• Income tax preparation and estimated tax payments

• Multi-state tax compliance (crucial for athletes who play in multiple states)

• Entity structuring (including “loan-out” companies)

• Tax strategies for salaries, bonuses, and endorsement deals

• International tax planning

For athletes, tax planning is complex. You’re often earning income in multiple states and through different channels. Without proper tax planning, you could face significant penalties and unexpected tax bills.

Specialty Consulting Services

Depending on your needs, your financial front office might include professionals who can assist you in areas like:

• Brand licensing, publishing, and royalty consulting

• Name, image, and likeness (NIL) planning

• Insurance and risk management

• Film, TV, streaming, and media production

Much like position coaches who focus on specific aspects of your game, these professionals provide knowledge and experience when and where you need it.

The Benefits of a Complete Financial Front Office

Here’s what you gain from having a full team working behind the scenes for you:

1. Financial Visibility and Control

Perhaps the most important benefit is having complete visibility into your financial situation. Until you see it on paper, it’s hard to really understand how much is entering and leaving your bank account on a regular basis.

With monthly reporting, you can see exactly where your money is going — allowing you to make informed decisions about your spending and saving.

2. Proactive Problem Prevention

Your financial team can identify potential issues before they become problems. If your spending starts to exceed your income, your business manager can have a conversation with you about adjusting your habits.

In some cases, they might recommend specific monthly spending caps to help you maintain positive cash flow.

3. Coordinated Financial Strategy

With everyone working together, you get a coordinated approach to your finances. Your business manager ensures your accounting team has all the information they need, which then provides your tax team with accurate data for tax planning.

This coordination is seamless to you — you have one point of contact who manages everything behind the scenes (your business manager), but you benefit from the specialized expertise of each team member.

4. Relief from the Burden of Financial Management

Perhaps most importantly, a financial front office frees you to focus on what you do best: play your game. You don’t have to worry about paying bills, tracking expenses, or preparing for tax season. Your team handles it all, giving you the mental space to excel in your career.

The Invisible Gears of Your Financial Watch

Your financial front office works like a precision watch. You might only see the time (the final reports and recommendations), but behind the face is a complex system of gears working together. While you may only touch base with one or two people, there are several different teams of people — business management, accounting, tax, consulting — working on your behalf.

This behind-the-scenes work keeps everything running smoothly, even if you don’t see all the moving parts.

Build Your Winning Team with MGO

Our dedicated Entertainment, Sports, and Media team understands the unique financial challenges professional athletes face — multi-state income, endorsement deals, loan-out companies, and a career span that requires careful planning. From business management to tax, accounting, and consulting, our experienced professionals work together seamlessly to provide the support you need at every stage of your career.

With our team as your financial front office, you can focus on winning on the field while we take care of the rest. Contact us today to learn how we can customize our services to your needs and goals.

The post Why Every Pro Athlete Needs a Financial Front Office appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• A business manager helps you stay focused on your creative career by handling the financial and logistical complexities that come with success in entertainment.

• From budgeting and tax strategy to international compliance, risk management, and investment vetting, business managers protect your earnings and help you plan for both boom years and dry spells.

• Whether you’re just starting out or managing major deals, a business manager is key to building long-term financial stability and turning fame into lasting wealth.

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Success in the entertainment industry can be thrilling — and fast. One day you’re auditioning and hustling, and the next you’re signing your first major deal. But with that success comes complexity. Contracts. Cash flow. Taxes. Big purchases. Bigger risks.

That’s where a business manager becomes indispensable.

If you’re a working entertainer — whether as an actor, director, writer, producer, or content creator — you need someone watching your financial back so you can focus on what you do best. A business manager isn’t just a luxury for the elite; it’s a critical support system that helps turn career momentum into long-term financial security.

8 Reasons Business Managers Are Essential for Entertainers

Once the wheels on your career start rolling, here’s why you want a business manager in your corner:

1. Handle the Business So You Can Stay Creative

Entertainers are visionaries. But managing day-to-day expenses, long-term financial goals, and tax obligations requires a different skill set — and a lot of time. Business managers act as your financial quarterback, helping you handle:

• Bill payments and banking

• Budgeting and cash flow planning

• Major purchases like homes and cars

• Tax strategy, compliance, and filings — domestically and internationally

• Collaborating with your advisory team on investment opportunities and due diligence

• Team coordination with attorneys, agents, and financial advisors

• Estate planning

While you focus on your craft, a business manager helps maintain the structure behind the scenes — aligning your lifestyle and spending habits with your income and goals.

2. Get a Head Start, Not a Headache

The best time to bring on a business manager isn’t when you’ve made it big. It’s before that.

Many entertainers see an influx of income early in their careers — sometimes unpredictably and in large amounts. Without someone helping build a solid financial plan from the start, it’s easy to overspend or mismanage resources.

Even earning a couple hundred thousand dollars or working in a different state or country can create tax complexities or prompt decisions — like forming a business entity — that require guidance. Having a manager early on helps build good financial habits and prepare for income fluctuations, which are common in this industry.

3. Understand What You’re Really Earning

You might sign a million-dollar deal — but that doesn’t mean you take home a million dollars. After agent commissions, legal fees, business management, taxes, and other deductions, the actual net income could be closer to 35 to 40 cents on the dollar.

That’s a surprise most entertainers don’t see coming.

A business manager helps break down what your deals really mean for your bottom line. They plan for taxes, track spending, and project income and cash flow over time to keep you financially stable — especially in the off-seasons when work slows or stops altogether.

4. Plan for Peaks and Valleys

Every career has its highs and lows, but in entertainment, those extremes can be particularly wide. A steady year might be followed by months with no income at all. Think writer’s strikes. Production shutdowns. Or just a natural lull between projects.

A business manager builds financial plans to help weather those dry spells — so you’re not scrambling when the checks stop. That might include:

• Setting aside emergency funds

• Balancing liquid versus long-term investments

• Evaluating major purchases relative to available cash

• Forecasting income needs for 3–5 years

Rather than letting a peak year prompt a rash decision — like buying a multi-million-dollar house — a business manager helps align your lifestyle with your financial reality.

5. Protect Against Costly Missteps

When your name is in the credits (or trending on social media), investment pitches will follow. Some may come from friends. Others may seem like can’t-miss opportunities. But not all that glitters is gold.

One of the most common mistakes entertainers make is jumping into investments without proper vetting. Business managers step in to help with due diligence — researching deals, reviewing contracts, and bringing in attorneys or financial advisors when necessary. Their job is to help protect your wealth from risky decisions and align your investments with your long-term goals.

They can also help make sure you have contracts in place for domestic staff and other personal service providers — protecting your privacy, minimizing liability, and helping you avoid costly disputes down the road.

6. Build the Right Team — and Lead It

Think of a business manager as your in-house CFO. But unlike a solo act, they don’t work in isolation. They coordinate with everyone on your team — agents, attorneys, financial planners, insurance brokers — to make sure all aspects of your financial life are connected.

A good business manager doesn’t just generate reports and process numbers — they act as a strategic advisor with your best interests at heart. That includes regular communication, personalized advice, and a clear understanding of your financial picture.

When evaluating a potential business manager, ask:

• How often will we communicate?

• What kind of reports or updates will I receive?

• How will you help me make financial decisions?

• Can you work with the other professionals on my team?

The right manager should not only be qualified — but committed to helping you succeed beyond the next paycheck.

7. Look Out for Your Best Interests

The best business managers aren’t just number crunchers — they’re protectors. That means spotting red flags before they become problems, like making sure your employees are logging a lunchtime break if they work more than five hours.

It also means stepping up during emergencies — whether that’s getting you a last-minute hotel extension during the California wildfire evacuation or being the first to coordinate with your insurance broker to fast-track your claim.

Your business manager is often the first person you call when something goes wrong — and the one quietly making sure it doesn’t.

8. Set the Foundation for Long-Term Success

At the end of the day, fame and fortune don’t guarantee financial security. But with the right guidance, they can become the foundation for lasting wealth and freedom.

A business manager helps you:

• Navigate complex income structures and tax issues

• Build a spending and savings plan that reflects your reality

• Avoid costly financial traps

• Assemble a trustworthy advisory team

• Plan for the future — even when the future is uncertain

Whether you’re landing your first breakout role or headlining your fifth series, a business manager helps translate your creative wins into a secure, stable, and fulfilling financial future.

In a world where so much is unpredictable, that’s a role every entertainer needs.

How MGO Can Help

As a full-service CPA and consulting firm with a dedicated Entertainment, Sports, and Media practice, we bring a level of depth that goes beyond the typical business management firm. That means when you’re launching a production company or heading overseas for a tour, you get access to a national network of tax, audit, and consulting professionals.

Need help navigating California’s tax structure? Our state and local tax team is on it. Filming in Europe? Our international tax professionals can help you plan proactively. That kind of integrated support is what makes MGO different, and it’s why so many entertainers choose us to meet their long-term financial needs.

Reach out to our team today to find out how we can help you protect, grow, and oversee your money — wherever your career takes you.

The post Why Every Entertainer Needs a Business Manager appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• You have the power to monetize directly through your audience, but with that power comes the need for financial discipline and business structure.

• Building long-term value means thinking beyond content — hiring a team, managing risk, and developing your brand like a business.

• To stay ahead, diversify income streams, choose brand partnerships wisely, and bring in professional advisors to support growth and protect your future.

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Content creators are redefining the entertainment and media business. Instead of waiting for permission from studios, publishers, or networks, creators have direct access to their audience — and, with that, the power to monetize on their own terms.

This shift brings opportunity, but it also brings responsibility. Without traditional infrastructure, creators must manage their business, taxes, and growth strategy with intention. Here’s how to take control of monetization and build long-term value.

You’re the Talent and the Enterprise

The biggest difference between content creators and traditional actors, musicians, or filmmakers? Full control. You’re not waiting for a green light from a network or a record deal from a label — you’re earning revenue directly from your audience through platforms like YouTube, TikTok, Patreon, Substack, OnlyFans, Spotify, and more.

And when your content resonates, it pays. You can monetize through ad revenue, subscriptions, sponsorships, and product lines. You’re not just building content. You’re building a brand — and, potentially, a full-fledged media company.

… But You’re Also Assuming the Risk

Unlike traditional talent, creators assume the upfront costs and operational burden. That includes paying for production, hiring help, and managing variable income. Many new creators run into challenges like:

• Unpredictable revenue: You might earn five figures from AdSense one month, and half that the next.

• Cash flow management: Income may arrive on a 30- to 45-day delay, while expenses come fast and upfront.

• Cost-heavy content: High production value can cut deeply into profits, especially without budgeting discipline.

These challenges are manageable — but only with financial oversight. Monthly profit and loss reviews, budgeting by project, and forecasting cash flow are essential tools for staying ahead.

5 Essential Growth Strategies for Content Creators

Once you’ve built an audience, it’s time to think bigger. These five strategies can help you create a stronger foundation, reduce risk, and unlock long-term value.

1. Build Your Team

You can’t do everything — nor should you. Creators looking to scale need to think like business owners. That means hiring trusted editors, producers, business managers, or even assistants who can help grow your operations without diluting the quality of your content.

If you’re publishing multiple videos a week, or running multiple channels or product lines, you’ll need a team to help keep it all moving. And building a team means learning to delegate and budget not just for today’s content, but for long-term goals.

2. Think Like a Brand

Top-tier creators aren’t just making videos or podcasts — they’re launching lifestyle brands, media companies, and product lines. To get there, operations need to be formalized: create business entities, develop contracts, track profits and losses, and start thinking about enterprise value.

The goal? Create a business that investors, collaborators, or even acquirers see as valuable — not just because of your audience size, but because of the infrastructure you’ve built around it.

3. Choose Partners Carefully

Sponsorships can be lucrative, but not all money is worth taking. Partnerships that don’t align with your brand or audience can create backlash. Viewers are smart — they can tell when something feels inauthentic. One misstep can hurt engagement, affect recurring revenue, and force a recalibration of your strategy.

That’s why brand alignment and long-term thinking are critical. Say yes to partnerships that enhance your brand — not ones that dilute it for a quick payday.

4. Diversify Beyond Algorithms

Relying on a single platform’s algorithm is a risky move. TikTok, YouTube, and Instagram might amplify your reach today, then change the rules tomorrow. Top creators are mitigating this risk by building direct-to-audience channels like:

• Email newsletters via Substack

• Merch stores via Shopify

• Private communities on platforms like Telegram or Discord

This approach creates more control, deeper engagement, and more reliable revenue.

5. Plan for Longevity

Many creators are earning large sums early in life — often before understanding tax obligations, estate planning, or long-term wealth building. That’s where professional advisors come in.

A trusted team can help you navigate:

• Weekly or monthly budgeting: To track both personal and business expenses

• Cash flow management: To align incoming revenue with outgoing expenses

• Tax planning and filings: To avoid surprises, capture deductions, and comply with federal, state, and local tax rules

• Business structuring: To reduce liability and organize your operations

• Estate and trust planning: Especially important once assets start to accumulate

• Insurance coverage: To protect against platform liability, brand risks, or cyber exposure

Financial literacy is just as important as creative vision. With the right tools and guidance, you can protect your earnings and multiply your opportunities.

Own the IP, Own the Distribution, Own the Value

The biggest shift in entertainment today is that audiences are now the gatekeepers. They are the distribution model. And when creators own that relationship — and their intellectual property (IP) or brand — they hold the power to scale in ways that used to be impossible.

Ellie Heisler, partner and entertainment group lead at the law firm Nixon Peabody, provides advice to clients on brand building, licensing, intellectual property protection, and operations. She shares:

“Unlike traditional actors, writers, directors, and producers that are hired on a work-for-hire basis, content creators retain ownership of the IP they create and distribute on their channels. This allows for full creative control, brand integrations, passive platform revenue, and the ability to continue to build their brand. We often help our clients protect their IP and brand by registering copyrights and trademarks as well as enforcing their IP rights against infringers.”

Smart creators know that the content is just the starting point. Long-term value lies in building the business behind it — with strategy, structure, and support.

How MGO Can Help

You’ve built something incredible — now it’s time to take it to the next level. Our Entertainment, Sports, and Media team helps content creators like you streamline your finances, structure your business, and build sustainable, long-term value.

Whether you need help managing income that varies significantly from one month to the next, setting up your business entity, or planning for taxes and future growth, we can help support your success so you can stay focused on your craft.

Reach out to our team today to start building a financial strategy that matches your creative vision.

The post How Content Creators Can Take Control of Monetization appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• Pro athletes can minimize tax stress by approaching tax planning like off-season conditioning — preparing year-round to streamline filing.

• Navigating the “jock tax” requires filing income taxes in multiple states where games are played, adding complexity to tax obligations.

• Contributing to a retirement account can help reduce taxable income during peak earning years while building long-term financial security.

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Just like every professional sport has a season and an off-season, so do taxes. Tax season is the period between January and April each year when you file your income taxes. Now that tax season is over, how can you get in better shape through planning and preparation for next year?

Unfortunately, too many professional athletes make the mistake of only thinking about taxes when the deadline looms. That’s like showing up to the first game of the season without putting in the conditioning work beforehand — you’re not setting yourself up to play your best.

Whether you’re just starting your career or you’re already a veteran, taking a strategic approach to tax planning will save you stress and money when it’s time to file. Let’s break down some key strategies to make tax season a win.

Take Advantage of Tax Planning

Think of tax planning and tax filing like training versus competing. Filing your taxes is game day — it’s about reporting what happened during the past year and making sure everything is accurate and compliant. Tax planning, on the other hand, is the off-season work — it’s about making strategic moves to minimize your tax burden before it’s time to file.

Tax filing is straightforward but time sensitive. You’re preparing and submitting your tax return to the IRS and any state(s) where you have a tax obligation — reporting your income, deductions, and credits from the previous year. You calculate the amount you owe or your refund and make sure you hit deadlines. It’s a backward-looking process, reviewing what happened last year and getting everything in order to stay compliant.

Tax planning is where you take control. It’s all about strategizing throughout the year to reduce your overall tax bill. You’re making choices about timing income and expenses, leveraging retirement accounts, and even factoring in the different states where you play. It’s a forward-looking process, keeping your financial future in mind.

Pro Tip: Treat tax planning like off-season conditioning — put in the work year-round to make filing faster and more efficient.

Understand Your State and Local Tax Obligations

One of the most challenging parts of filing your taxes as a pro athlete is navigating the “jock tax.” This tax requires you to pay income taxes not only in your home state but also in each state and city where you play games. It’s calculated based on “duty days” — any day you spend working (including practices, games, and team meetings) in each locality. 

The concept of the jock tax took off in 1991 when California targeted Michael Jordan and the Chicago Bulls after they defeated the Los Angeles Lakers in the NBA Finals. Illinois then retaliated with its own tax on visiting athletes and the practice quickly spread nationwide. Today, almost every state imposes some form of jock tax.

How does the jock tax affect you? Let’s say you’re based in Florida (a state with no income tax), but you play games in New York, California, and Texas. You’ll be filing state tax returns for each of those states, and the tax you owe will be calculated based on how many duty days you spent in each place. The administrative burden of filing in multiple states can be overwhelming — not to mention the risk of double taxation if you’re not careful about claiming credits in your home state for taxes paid elsewhere.

Where you choose to live can significantly impact your overall tax liability. States like Florida, Nevada, Tennessee, and Texas don’t have a state income tax, making them attractive for athletes looking to minimize their tax bills. But it’s essential to be strategic, as moving your primary residence is a major decision with plenty of financial implications.

Pro Tip: Work with a tax professional who understands multi-state filings and can help you navigate the jock tax maze. The last thing you want is to overlook a state return and face hefty penalties down the road. 

Make Retirement Contributions Part of Your Tax Strategy 

One of the smartest tax planning moves you can make as a pro athlete is contributing to a retirement account. Your contributions can lower your taxable income while helping secure your financial future. 

Depending on your situation, there are several tax-advantaged options to explore. If you’re self-employed or have endorsement income, an individual 401(k) or a SEP IRA could allow you to contribute large amounts and defer taxes until retirement. If you’re part of a league with a pension plan, those contributions may be made on your behalf — but supplementing them with your own traditional or Roth IRA can give you more flexibility and control. 

For athletes, whose peak earning years are often short, retirement accounts are invaluable tools. The tax savings can be substantial, especially in high-earning years. Plus, having a well-funded retirement plan gives you peace of mind for life after your career winds down. 

Pro Tip: Maximize your contributions in years when your earnings are highest. This can help offset the impact of the jock tax by reducing the income subject to taxation. 

Ready to Get in Tax Season Shape?  

Taking a proactive approach to your taxes means less stress, fewer surprises, and more savings when it’s time to file. Just like conditioning in the off-season sets you up for success on game day, putting in the effort now will help prepare you when the whistle blows on the next tax season. 

How MGO Can Help 

At MGO, we understand the unique tax challenges you face as a professional athlete. Our Entertainment, Sports, and Media team has decades of experience helping pro athletes minimize tax burdens. Let us help you with tax planning, federal, state and local tax, and putting together a winning strategy so you can focus on dominating your sport. Connect with us today to get your taxes in shape for the upcoming season.

The post Off-Season Tax Tips for Pro Athletes  appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• Know the real value of your contract by focusing on the net amount after taxes, fees, and deductions — not just the headline number. 

• Explore negotiation options beyond salary, including bonus structure and tax-friendly terms, to maximize your take-home pay. 

• Plan for hefty taxes on signing bonuses, and consider strategies like residency choices, deferral options, and smart investments to protect your earnings. 

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Making the leap from amateur to professional athlete is an exciting milestone, but signing your first contract comes with financial complexities you may not have faced before. Whether you’ve been preparing for this moment for years or it’s arrived sooner than expected, understanding how your contract, salary, and signing bonus will impact your finances is essential.  

Let’s break down what you need to know before you put pen to paper.  

How Much Are You Willing to Sign For — and What Will You Take Home? 

Your first pro contract might be worth more money than you’ve ever seen before, but don’t let the big numbers fool you. Taxes, fees, and other deductions will greatly impact what you take home. 

Before agreeing to a deal, it’s important to consider the “net” amount — the money you will have after taxes and deductions. A contract worth $1 million does not mean you’ll see $1 million in your bank account. Federal and state taxes, agent fees, and other obligations can take a major cut. The key is to focus on what you will actually keep, not just the headline number. 

Do You Have Room to Negotiate? 

In most major pro sports leagues, draft position determines much of a contract’s structure — including how much room you have to negotiate. First-round picks typically receive more leverage when negotiating signing bonuses and guaranteed money, while later-round picks often have fewer options. 

That said, negotiating terms beyond just salary — such as how bonuses are structured, incentives, and tax-friendly options — can make a dramatic difference in what you take home. Having a knowledgeable advisor by your side is critical to making sure you don’t leave money on the table. 

How Are Signing Bonuses Taxed? 

Signing bonuses are one of the biggest financial perks of going pro. Unlike salaries that are paid throughout the year, signing bonuses are often paid upfront or in structured installments. But before you start making big purchases, you need to understand how they are taxed. 

Are Bonuses Taxed at a Higher Rate?  

Yes. The IRS treats signing bonuses as supplemental income, which means they can be subject to a higher withholding rate. The standard federal withholding rate for bonuses is typically 22% up to $1 million and 37% for amounts over $1 million.  

What About State Taxes?  

State taxes also play a major role. If your team is based in a high-tax state (like California or New York), you could owe state income tax on your signing bonus. The California bonus rate is 10.23% and New York is 11.7%.  However, in some cases, teams can structure contracts in ways that minimize state tax burdens — so it’s worth reviewing all options. The key is residency of the athlete at the time of signing the contract unless the language indicates that the bonus is earned based upon duty days or games played. This is addressed in more detail below.

Understanding the “Net Signing Bonus” 

What does “net signing bonus” mean? Simply put, this is the amount you’ll actually receive after taxes and deductions. A $2 million signing bonus may only leave you with around $1.0–$1.3 million after federal tax (income and employment), state tax, and agent fees are deducted. 

Because bonuses are taxed immediately upon payment, many athletes are surprised at how much is taken out before they even see the money. That’s why it’s critical to plan ahead and look at strategies to manage your tax burden. 

Ways to Manage Taxes on Your Signing Bonus 

There are several strategies to reduce or manage the taxes on your signing bonus. Depending on your situation, these may include: 

• Establish residency in a tax-friendly state: If possible, signing with a team in a state with no income tax (like Florida, Texas, or Tennessee) can help you keep more of your earnings. 

• Defer income when possible: Some contracts allow you to defer portions of your bonus to future years, spreading out your tax liability over time. 

• Invest wisely: Using tax-efficient investment strategies can help grow your wealth while minimizing tax burdens. 

• Work with a financial professional: An experienced CPA or financial advisor who works with pro athletes can help navigate tax strategies tailored to your situation. 

Planning for the Long Term 

Your first contract is the beginning of your financial journey as a professional athlete. Many athletes earn most of their lifetime income in a short playing window, so planning wisely from day one is essential. 

If you’re preparing to sign your first pro contract, don’t go through it alone. With the right guidance, you can make smart financial decisions that set you up for success — both on and off the field. 

How MGO Can Help 

Our Entertainment, Sports, and Media team has worked with professional athletes for over three decades, helping them navigate contracts, taxes, and long-term financial planning. Whether it’s structuring your signing bonus efficiently, managing multi-state tax obligations, or setting up investments for long-term security, we can help you make the most of your earnings. Contact us today.

The post Navigating Your First Pro Contract Signing Bonus: What You Need to Know appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• A single project can evolve into a thriving business with multiple revenue streams.

• Creators like Phil Rosenthal, Marie Kondo, and Lin-Manuel Miranda have leveraged ownership and smart deal-making to strategically expand their work.

• Growing your creative brand requires not just vision but also careful financial planning — from royalty accounting to tax considerations across different markets.

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Every tree begins as a seed — a small idea that takes root and, with the right conditions, grows into something much larger, branching out in unexpected ways. The same principle applies to creative endeavors. What starts as a single passion project can evolve into multiple revenue streams, expanding across industries and media formats.

Take George Lucas’ Star Wars. The film was passed over by multiple studios before finally making it to the big screen in 1977. But Lucas made a shrewd business move: instead of opting for a large upfront payment or even a higher percentage of the profits, he negotiated for sequel and merchandising rights. That decision transformed Star Wars from a nice payday for Lucas into a billion-dollar empire spanning toys, video games, books, TV series, and theme park attractions.

Lucas was ahead of his time, but today entertainers and creators are increasingly leveraging projects to expand their reach and maximize financial potential. If you’ve built something that resonates with an audience, there are ways to spin it into new opportunities. However, these additional revenue branches come with financial, accounting, and tax considerations that can be just as complex as the creative process.

5 Creators Who Turned One Idea Into Multiple Revenue Streams

If you’re wondering how to expand your own creative work, look no further than these entertainers who turned a single project into a thriving business:

1. Phil Rosenthal: Food, Travel, and Storytelling

Phil Rosenthal first found success as the creator of Everybody Loves Raymond. After that series ended, Rosenthal leveraged his storytelling expertise into additional projects — including two books and adaptations of Everybody Loves Raymond for multiple international audiences. He also produced the comedic documentary Exporting Raymond about his efforts to cast and produce the show in Russia.

More recently, Rosenthal’s passion for food and travel has led him in a new direction. His Netflix series Somebody Feed Phil became a global hit — which he has expanded into a book, merchandise, live tour events, and a soon-to-open diner in Los Angeles. By continuously finding ways to evolve his work, he has built a multifaceted brand that keeps growing.

But Rosenthal is somewhat of a purist about the process, believing any extensions and growth should be organic.

“You want a natural snowball. I’m not making snow — it grows naturally out of the original success,” Rosenthal explained. “Doing a food and travel show, you’re lucky if you get on the air. Then you’re lucky to stay on. Then you’re lucky if anybody watches. I wasn’t thinking about books or tours when I started Somebody Feed Phil. I was thinking about making the show as good as it can possibly be.”

2. Will Arnett, Jason Bateman, and Sean Hayes: SmartLess Podcast

What started as a casual podcast between three actor friends during the pandemic has since become a powerhouse in the podcast industry. The SmartLess podcast, known for its candid celebrity interviews, caught the attention of major platforms. The trio signed an exclusive three-year, $100 million deal with SiriusXM. But they didn’t stop there — they launched a national tour, filmed it for a docuseries, and sold it to MAX. What began as a fun side project became a multimillion-dollar media brand.

3. Marie Kondo: From Tidying Up to Business Empire

Marie Kondo’s simple yet powerful message about decluttering your life struck a chord with millions. Her book, The Life-Changing Magic of Tidying Up, became a bestseller, but she didn’t stop there. She expanded into a hit Netflix series (Tidying Up with Marie Kondo), online courses, a home-organizing consulting business, and even her own product line of storage and organization tools. By capitalizing on the movement she created, Kondo turned a single book into an entire lifestyle brand.

4. Lin-Manuel Miranda: Hamilton and Beyond

When Hamilton became a Broadway phenomenon, Miranda saw the opportunity to expand beyond the stage. By maintaining ownership over the production, he turned it into a global touring success, a best-selling book, and a Disney+ film deal. Merchandise, educational content, and international licensing have further extended the Hamilton brand. As the writer of the music, lyrics, and book for the musical, Miranda is positioned to continue earning from the brand well into the future.

5. Taylor Swift: Reclaiming Her Masters

After losing control of her original recordings, Swift didn’t just move on — she turned adversity into opportunity. By re-recording her albums (Taylor’s Version), she not only regained ownership of her music but also created a new wave of fan engagement and sales. She took this strategy further by transforming her record-breaking Eras Tour into a film, bypassing traditional Hollywood studios and distributing it directly through AMC Theatres. Swift’s ability to expand her artistry into multiple revenue streams while retaining ownership is a case study in modern entertainment business strategy.

Expanding Your Creative Work: The Financial Side

Turning your creative idea into a full-fledged business isn’t just about content — it also involves critical financial and planning decisions. As you grow, you may need to consider:

• Tour accounting: If live events or performances are part of your expansion, tracking revenue, expenses, and tax obligations across multiple cities or countries is essential — as is efficiently routing your tour to avoid excess travel, transportation costs, and burnout.

• Royalty accounting: Whether you’re earning from music, books, streaming, or licensing, proper accounting ensures you receive the royalties you’re owed.

• Deal structuring: The way you structure your contracts can impact your long-term earnings. Negotiating for ownership, revenue sharing, and intellectual property rights can set you up for financial success.

• State and local taxes: Different states have different tax rules, especially for digital and live entertainment. If you perform in different states or generate other income in different jurisdictions, you may owe taxes to them. Understanding your obligations can prevent surprises at tax time.

• International tax planning: If your work expands globally, you’ll need to navigate international tax laws and consider various royalty and business structures to optimize your earnings and minimize tax burdens.

“You have to do your homework,” Rosenthal shared. “The first time I did my tour I had no idea how much time I would be spending bouncing around from country to country, and within countries. Now I pay a lot of attention to routing and having adequate time for breaks and travel. You can’t take anything for granted.”

How MGO Can Help 

Expanding your creative work into multiple revenue streams is exciting, but it also brings financial complexities that require experienced guidance. Our Entertainment, Sports, and Media team specializes in helping entertainers and creators navigate accounting, tax, and business structuring so you can focus on what you do best.  

Whether you’re managing touring income, negotiating royalties, or planning for international expansion, we’re here to support your journey. Reach out today to explore how we can help you grow your creative seed into a thriving revenue tree.

The post How Savvy Entertainers and Creators Turn Creative Seeds Into Revenue Trees appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• Today’s actors, athletes, and influencers are increasingly leveraging their personal brands to become successful entrepreneurs.

• Building an authentic brand that aligns with your public persona is crucial for long-term success, along with exploring licensing, equity opportunities, and diversifying revenue streams.

• Proper financial planning — including business structuring, tax optimization, and guidance in areas like licensing and royalty management — can help support your efforts.

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In recent years, we’ve seen a surge in entertainers, creators, and pro athletes stepping into the entrepreneurial world. This trend isn’t just a side hustle; it’s a strategic move to diversify income and create lasting wealth.

From sports to entertainment to social media, high-profile talent is turning to entrepreneurship, building brands, or even “becoming the brand” themselves. Instead of just assuming a single role in your industry, the goal is to leverage your unique persona, audience, and influence to build something bigger.

The Rise of the Celebrity Entrepreneur

Here are examples of five celebrities who have reached notable entrepreneurial heights over the past decade:

Selena Gomez

Gomez has made the transition from the Disney Channel to pop stardom to entrepreneur look seamless. As the founder of Rare Beauty, a makeup brand launched in 2020 with a mission to break down unrealistic standards of perfection, she recently earned a spot on the Bloomberg Billionaires Index. But Rare Beauty is more than just a vehicle for wealth; it’s a reflection of Gomez’s deeply held values. Through the Rare Impact Fund, she has turned her brand into a platform for championing mental health awareness, blending purpose with profit in a way that resonates with millions.

Ryan Reynolds

With roles in recent hits like Deadpool & Wolverine and IF, Reynolds is one of the biggest movie stars on the planet. Off the silver screen, he has spent the last decade successfully expanding his brand into the business world with ventures like Aviation American Gin, Mint Mobile, Wrexham Association Football Club, and many more. His approach is a masterclass in brand authenticity — each venture incorporates and reflects his public persona, making the transition from actor to entrepreneur appear effortless.

Serena Williams

Known for her 23 Grand Slam titles, Williams has also built a career as a savvy investor. In an April 2024 TikTok video, Williams shared that she has invested in more than 85 companies in her personal portfolio — including 14 “unicorns” (companies with a valuation of more than $1 billion) and several “decacorns” (companies valued at $10 billion or more). Through her firm, Serena Ventures, she focuses on funding women- and minority-owned businesses, underscoring her commitment to empowering underrepresented entrepreneurs.

MrBeast (Jimmy Donaldson)

The mind behind the most-subscribed YouTube channel in the world (more than 340 million subscribers as of January 2025), Donaldson has expanded his brand with ventures like MrBeast Burger, a virtual dining concept, and Feastables, his chocolate bar company. In addition to developing these brands, he also plays an active role in marketing them. Donaldson’s innovative business model thrives on his deep understanding of audience engagement, which has helped him build one of the most loyal fan bases in the world.

These examples highlight a key lesson: As an influential personality, you have a unique brand that can be leveraged into successful business ventures. The question is: How do you start, and what financial considerations should you keep in mind?

Key Financial Tips for Building Your Brand

Transitioning from your topline career to an entrepreneurial role requires more than just ambition — it requires a solid financial strategy. Below are key financial tips to help you navigate the world of business ownership and brand building.

1. Understand the Importance of Authenticity

When building a brand, authenticity is crucial. Your business should reflect who you are and what you stand for. Audiences can quickly spot a brand that doesn’t align with your public persona, which can hurt both your reputation and your business. Ask yourself, “Does this venture align with my values and the image I’ve cultivated?”

2. Consider Licensing and Intellectual Property

Licensing is a powerful tool that allows you to monetize your brand without selling it outright. Think of it as renting out your name, image, or intellectual property (IP). For instance, NFL players/brothers Travis and Jason Kelce recently struck a podcast deal with Wondery that included licensing their IP, allowing the company to develop products based on the podcast. This approach lets you maintain ownership while generating ongoing revenue.

3. Explore Equity Opportunities

Equity can be a smart way to build long-term wealth. Instead of taking a flat fee for endorsements or partnerships, consider negotiating for equity in the company. This approach has been successfully employed by celebrities like Ryan Reynolds, allowing them to benefit from the growth and success of the businesses they are involved in.

4. Get Your Financial Structure Right

Proper financial planning is essential when expanding into entrepreneurship. This includes everything from setting up the right business structure to managing taxes and cash flow. You might consider working with an advisor or CPA who specializes in entertainment and entrepreneurial ventures. They can help you navigate the complexities of business ownership and make the most of your earnings.

5. Diversify Your Revenue Streams

As the entertainment industry continues to evolve, so should your approach to generating income. Diversifying your revenue streams not only provides financial stability but also gives you the freedom to pursue projects you’re passionate about. Whether it’s launching a product line, investing in startups or licensing your brand, multiple income sources can safeguard your financial future.

Services That Can Help You Succeed

Building a successful brand or business venture requires more than just a great idea; it requires a solid financial foundation. Here are some services that can help you navigate the complexities of entrepreneurship:

Business Structuring and Tax Planning

Properly structuring your business can protect your assets and minimize your tax liability. A tax advisor can help you choose the best structure for your venture, whether it’s an LLC, S corporation, or another entity, and help you take advantage of all available tax benefits.

Licensing Advisory

If you’re considering licensing your brand or intellectual property, a licensing advisor can help you negotiate deals that maximize your revenue while protecting your interests. They can also guide you on how to manage licensing fees, royalties, and other income streams effectively.

Royalty and Residual Accounting

Keeping track of royalties and residuals can be complex, especially if you have multiple income streams. A financial professional can help you manage these payments, verifying you are receiving what you are owed and identifying any discrepancies.

Financial Consulting

Whether you’re investing in a new business, negotiating equity, or planning your exit strategy, financial consulting services can provide the guidance you need to make informed decisions. This includes everything from cash flow management to exit planning and succession strategies.

Embracing the Entrepreneurial Mindset

The transition from entertainer, creator, or pro athlete to entrepreneur isn’t just a trend — it’s a smart move for anyone looking to build a sustainable career in an unpredictable industry. By leveraging your brand, exploring new revenue streams, and getting the right financial advice, you can create a business that not only supports your lifestyle but also sets you up for long-term success.

How MGO Can Help

We specialize in helping entertainers like you make the leap into entrepreneurship. Our Entertainment, Sports, and Media practice offers the experience you need to manage your brand, structure your business, and maximize your financial potential. Whether you’re just starting or looking to expand your ventures, we’re here to guide you every step of the way. Let’s talk about how we can help you turn your entrepreneurial vision into reality.

The post From Pro to CEO: How Entertainers and Athletes Become Entrepreneurs appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• Professional gaming careers can be lucrative but short-lived, making smart financial management crucial from the start.
• Mastering the intricacies of contracts, taxes, and revenue streams is essential for pro gamers to maximize earnings and avoid costly pitfalls.
• Building a sustainable financial future in esports demands a strategic balance between capitalizing on current opportunities and planning to achieve long-term goals.

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The rise of electronic sports (esports) has been nothing short of phenomenal. According to Variety, esports viewership increased a whopping 92% from 2019 to 2023 — with viewers watching more than 2.5 billion hours of esports events last year. Major colleges and universities like Ohio State now offer esports degrees, and brands like Intel, Coca-Cola, and Mastercard are spending millions on esports sponsorships each year.

As a professional gamer, you’re part of this fast-growing industry. But with the thrill of competition and the allure of sponsorships comes the challenge of managing your earnings. Whether you’re streaming on Twitch, competing on the esports circuit, or signing a deal with a major brand, understanding how to manage and maximize your income is crucial.

Making the Right Deal: Stream Play Versus Team Play

As a pro gamer, you’ll likely face a key decision: Should you focus on building your own brand through streaming or join a team? Both options have their pros and cons, and your choice will impact your earnings significantly.

Streaming: Building Your Own Brand

Streaming offers you the opportunity to build a personal brand and connect directly with your audience. Platforms like Twitch and YouTube allow you to monetize your content through ads, subscriptions, and donations. However, it also means you’re responsible for managing your content, marketing yourself, and properly tracking and reporting your earnings.

An additional challenge with streaming is validating that you’re getting the right percentage from platforms like YouTube. Are you confident that your views and ad revenue are being reported accurately? This is where working with a financial advisor or a business manager can help. They can audit your earnings, verify you’re being paid fairly, and help you optimize your revenue streams.

Joining a Team: Stability with a Salary

Joining an esports team can provide a steady salary and the chance to compete at the highest levels. Teams often handle sponsorships, brand deals, and the logistics of competition, allowing you to focus solely on your gameplay. However, the trade-off is that you may have less control over your brand, and the team may take a cut of your earnings from sponsorships or tournament winnings.

Before signing with a team, it’s critical to have a lawyer review your contract. They can help you understand the terms, such as how much of your earnings the team will take, what happens if you leave the team, and what other obligations you may have. Remember, a contract that seems straightforward can contain clauses that significantly impact your income and career.

Navigating Taxes in Professional Gaming and Esports

As you start earning from your gaming career, taxes are one of the first challenges you’ll face. Your earnings — whether from streaming, sponsorships, or tournament winnings — are all taxable. It’s essential to understand how taxes work in both the country/locality where you live, as well as any jurisdictions where you earn money.

Domestic Taxes: Earning Income Across the U.S.

In the United States, professional gamers are often subject to what’s known as the “jock tax.” Originally designed for athletes, this tax rule applies to individuals who earn income in states where they do not reside. Today, the rule extends beyond athletes to include high-income earners like entertainers and competitive gamers. The tax is typically based on the number of “duty days” you spend in a state for income-generating activities.

For example, if you live in Illinois and come to California for a tournament, California can tax you on that income — even if you’re only there for a few days. Enforcement of the “jock tax” varies by state and locality, and whether you are taxed may depend on how much you earn (the more you make, the more likely you are to be taxed). Because of varying state and local tax rules, you may end up owing taxes in multiple states and localities depending on where you compete and earn income.

Additionally, if you’re selling merchandise or other products as part of your brand, you’ll also need to be aware of sales tax obligations. Depending on where your customers are located, you may be responsible for collecting and remitting sales tax to different states and localities. Each jurisdiction has its own rules, and failing to comply with them could result in penalties or back taxes.

International Taxes: Considerations for Global Gamers

With esports growing globally, you might earn pro-gaming income from multiple countries — each with its own tax rules. For example, if you win a tournament in South Korea or get sponsorship from a European company, you may owe taxes in those countries. You also need to report all foreign income to your home country, adding complexity to your taxes.

Here are some considerations to keep in mind when managing international taxes:

• Double taxation: To avoid paying taxes in two countries on the same income, you can use options like exclusions or foreign tax credits (FTCs). Tax treaties between some countries can also reduce your tax burden. But not all countries have treaties, and claiming these credits can involve complex filings and detailed records. Knowing your options and understanding how to apply them can help you manage your taxes strategically and minimize what you owe across borders.
• Withholding taxes: Various countries impose a withholding obligation on certain types of revenue streams. This means, before you receive your earnings, the country may withhold a portion of your taxes. The rate varies depending on the type of income and local tax laws.
• Intellectual property (IP): Savvy professional gamers are cognizant of IP such as copyrights and trademarks, as well as name image and likeness (NIL). Whether revenue streams like photoshoots, appearances, speaking engagements, and even your social media presence are compensated as “services” or a “right of use” can influence taxation in various countries. Having clear contracts that appropriately define income classes can help you best manage taxation and protect your rights.

Given the complexity of both domestic and international tax laws, it’s wise to consult with a tax team familiar with the esports industry. They can help you navigate multistate and international tax rules, take advantage of deductions and credits, and structure your finances in a way that minimizes your tax burden across multiple jurisdictions.

5 Common Financial Pitfalls Pro Gamers Should Avoid

In the fast-paced world of esports and professional gaming, it’s easy to get caught up in the excitement and make decisions that could hurt your financial future. Here are a few pitfalls to watch out for:

1. Don’t Rush into Contracts

It’s tempting to sign the first deal that comes your way, especially when there’s a significant amount of money involved. But taking your time to understand the terms of the contract can save you from potential headaches down the line. Work with legal and financial advisors to review any offers before you sign.

2. Watch Out for Hidden Costs

Some deals come with hidden costs that can eat into your earnings. For example, if a team covers your living expenses but then deducts those costs from your winnings you could end up with much less than you expected. Always ask for a detailed breakdown of any expenses and how they will be handled.

3. Budget for the Long Haul

Esports careers can be short — a recent Washington Post headline read “Esports stars have shorter careers than NFL players” — with the peak years often occurring in your early 20s. This makes budgeting and saving for the future even more important.

4. Prioritize Needs Over Wants

When the money starts rolling in, it can be tempting to splurge on the latest gear or a luxury lifestyle. But remember, this income may not last forever. Prioritize saving and investing your money wisely. Work with a financial advisor to create a budget that accounts for your current needs and future goals.

5. Plan for a Sustainable Future

Consider how your current earnings can help you achieve your long-term goals. Whether you want to invest in a new business, save for retirement, or buy a home, planning ahead is key. This is where having a solid financial plan and the right advice can make all the difference.

Level Up Your Financial Strategy

Managing your finances as a pro gamer can be overwhelming, especially when you’re focused on winning and building your brand. That’s why having experienced professionals in your corner can make all the difference. Working with a team of advisors — whether it’s a tax professional, lawyer, or financial planner — can give you the peace of mind to focus on your game knowing your finances are in good hands.

How MGO Can Help

We know the unique challenges you face as a professional gamer. From reviewing contracts to navigating international taxes, we’re here to help you maximize your earnings and secure your financial future. Before you sign any deal or make a financial decision, talk to our Entertainment, Sports, and Media team.

The post How to Secure Your Financial Future as a Professional Gamer appeared first on MGO CPA | Tax, Audit, and Consulting Services.