• 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.

• 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.

• Name, image, and likeness (NIL) deals offer athletes exciting opportunities, but also potential pitfalls if not approached strategically.

• Athletes should educate themselves on taxes, carefully review contracts, and budget with long-term security in mind.

• With guidance on financial obligations, agreements, and smart money management, athletes can maximize NIL benefits while safeguarding their futures.

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You are a talented young athlete with a growing public profile. You’ve just been offered a Name, Image, and Likeness (NIL) deal, an opportunity that can put some extra money in your pocket or even, in some cases, make a more profound impact on your financial life. It’s an exhilarating time, but it’s also crucial to approach this new chapter with the right knowledge and mindset.

Three Essential Financial “Plays” Every NIL Athlete Needs To Know

Whether you’re a college or high-school athlete, or the trusted advisor to a young athlete, here are three critical actions you should take to avoid common financial pitfalls associated with NIL deals. 

1. Recognize Your Tax Obligation 

One of the first hurdles you’ll encounter in the world of NIL deals is taxes. It’s essential to understand that the money you earn from these deals is subject to taxation. Many young athletes overlook this, often because they’ve never had to deal with taxes before. 

To avoid potential financial trouble down the road, consider these steps: 

• Educate yourself: Young athletes receiving payments from NIL deals are responsible for paying taxes on that income just like professional athletes. Take the time to learn about taxes, especially how they apply to your earnings. Understanding the basics of taxation will empower you to make informed decisions. 

• Consult a tax professional: Before signing any NIL agreement, consult with an experienced accountant, tax advisor, or business manager. They can help you calculate your tax obligations, identify potential deductions, and develop a tax strategy tailored to your situation. Along with ensuring any federal, state, and local taxes you owe are paid on time (avoiding penalties), a tax professional can also help you navigate more complex situations – such as earning income across multiple states. 

• Practice smart spending: Resist the urge to splurge on electronics, clothes, or cars as soon as the money starts rolling in. Create a budget that considers your future tax payments, living expenses, and financial goals. Staying disciplined with your spending is key to long-term financial success. 

2. Execute Agreements Cautiously  

Navigating NIL deals can be tricky. There are various state laws and school policies to consider, along with a number of legal “gotchas” to avoid. Here’s how you can safeguard your interests:  

• Seek legal advice: Before signing any NIL agreement, engage a lawyer with experience negotiating NIL and brand endorsements for athletes. An attorney with expertise in sports contracts can help you navigate the important terms in an NIL deal, such as money, exclusivity, length of the agreement, how the brand can use your name, image, and likeness, and an athlete’s delivery requirements. An experienced attorney will help you spot potential pitfalls and ensure the agreement aligns with your long-term goals.  

• Beware of “standard” or simplistic agreements: When someone refers to a contract as “standard” or provides an overly simplified agreement, that should throw up a red flag. All it takes is the slightest language in your agreement to give a company unfettered rights to use your name, likeness and image in ways you never intended.   

• Follow regulations: An experienced advisor will help you navigate specific laws and policies set by your state, school, and the NCAA regarding NIL deals. For example, you cannot share photos or videos in your team uniform with logos from other brands without first getting permission from your school or the brands. 

3. Budget Wisely for the Long Term  

While newfound wealth can be exhilarating, it’s crucial to manage your finances wisely:  

• Prioritize needs over wants: When it comes to spending, prioritize essential needs over extravagant wants. Understand this financial windfall may be a one-time occurrence, so focus on building a secure future rather than indulging in immediate gratification.  

• Future-proof your earnings: Instead of assuming this is a continuous stream of income, treat each deal as if it were your last. Create a budget that accounts for potential future earnings and uncertainties, ensuring you’re prepared for any scenario.  

• Explore tax mitigation strategies: Consider tax mitigation strategies, such as retirement planning and deferral opportunities, to minimize your tax burden. Consulting a financial advisor can help you explore these options. 

Make the Most of Your NIL Opportunities

The legalization of NIL in college and high school sports represents an exciting shift for young athletes. It can offer game-changing money, enabling you to take care of your financial needs, along with building your brand for future growth. But with great success also comes great responsibility. Even professional athletes who’ve reached the highest pinnacles of their respective sports can end up without the financial resources they need if they don’t plan ahead. 

The good news is by recognizing the potential pitfalls and seeking professional guidance early in your NIL journey, you can better position yourself for long-term financial success. Remember, it’s not just about profiting from your name, image, and likeness today, but also securing your financial future for tomorrow. 

How MGO Can Help

Our Entertainment, Sports, and Media practice understands the unique challenges athletes face at all stages of their financial journey. Whether you need assistance with tax planning, contract negotiations, or financial strategy, we’re here to guide you toward a successful future in the world of sports and NIL. 

This article was co-authored by Leron E. Rogers, Partner at Fox Rothschild LLP.

The post 3 Game-Changing Financial Tips for Athletes Scoring NIL Deals appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• Many professional athletes go on to achieve even greater financial success in their lives after sports through proactive financial planning and capitalizing on post-career opportunities.
• Having the right financial advisory team is crucial for transitioning athletes to make smart money decisions across areas like investments, business ventures, taxes, estate planning, and risk management.
• With proper guidance, athletes can turn their playing careers into lifelong financial stability and growth through entrepreneurship, investments, and other lucrative second careers.

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As a professional athlete, you’ve spent years honing your skills, building your career, and making a name for yourself. But what happens when the final whistle blows and your playing days are behind you?

The good news is many athletes move on to highly successful and lucrative ventures after their time in sports — some even making more money than they did during their athletic careers. With the right financial support and strategic planning, you can be one of them.

From Athlete to Entrepreneur: Maximizing Post-Career Opportunities 

The transition to life after sports can be incredibly rewarding, opening doors to new and exciting opportunities. Many professional athletes have not only avoided the financial pitfalls often associated with post-career life but have also thrived financially.

Here are a few notable examples of athletes who’ve achieved significant financial success with their second careers:

Kenny Smith

Kenny “The Jet” Smith played 10 years in the National Basketball Association (NBA), winning back-to-back championships with the Houston Rockets in 1994 and 1995. While Smith made just under $12 million over his playing years, as an analyst on the Inside the NBA alongside Ernie Johnson, Charles Barkley, and Shaquille O’Neal, Smith reportedly takes home $16 million per year.

Maria Sharapova

While Sharapova earned over $300 million during a career where she became just the tenth woman to win all four major championships, she retired at the young age of 32 in 2020. Since that time, she has established herself as an investor and entrepreneur — working with health and wellness brands like Therabody and Tonal — while also serving on the board of directors for luxury fashion house Moncler Group.

Derek Jeter

Jeter played 20 seasons at shortstop for the New York Yankees, winning 5 World Series titles before retiring in 2014. After earning over $265 million in MLB salary, Jeter went on to found Jeter Publishing with Simon & Schuster and the media company The Players’ Tribune in 2014, which publishes first-person stories from athletes. From 2017, he became part-owner and CEO of the Miami Marlins. 

David Beckham

Playing 21 seasons of professional soccer for teams like Manchester United, Real Madrid, the LA Galaxy, Beckham racked up league titles and millions in contract dollars. Retiring in 2013, he transitioned into a successful business career — starting the management company DB Ventures and collaborating with brands like HUGO BOSS. In 2018, Beckham brought Major League Soccer to Miami as co-owner of Inter Miami CF.

These examples demonstrate the wealth creation potential that exists long after an athletic career ends. Of course, it’s not just about what you do after your playing days are over; it’s also about what you do with your money.

The Role of Financial Advisors in Your Post-Career Success

The right financial advisors can help you navigate the complex financial landscape, assisting you to make smart decisions that will benefit you in the long term. Here are some key areas where advisors can support you:

Investment Planning

Post-career, it’s essential to make your money work for you. Financial advisors can help you develop a diversified investment portfolio tailored to your risk tolerance and long-term goals. This could include stocks, bonds, real estate, and business ventures.

Business Ventures

Many athletes transition into entrepreneurship. Advisors can provide invaluable support in evaluating business opportunities, developing business plans, and managing your ventures. Whether you’re interested in starting a restaurant, a retail chain, or a tech startup, having the right guidance can make all the difference.

Tax Planning

High earnings often come with complex tax obligations. A financial advisor can help you navigate these complexities, enabling you to take advantage of tax-saving opportunities and stay compliant with regulations.

Estate Planning

Protecting your wealth for future generations is crucial. Advisors can assist you in creating an estate plan that distributes your assets according to your wishes, minimizing tax liabilities and providing for your loved ones.

Retirement Planning

Even if you’re transitioning into a second career, planning for retirement is essential. Advisors can help you set up retirement accounts, plan for long-term care, and establish a steady income stream throughout your retirement years.

Risk Management

Life is unpredictable, and managing risk is a crucial part of any financial plan. Advisors can help you select the right insurance policies and develop strategies to protect your assets against unforeseen events.

Taking the Next Step in Your Post-Playing Journey

Transitioning from a professional athlete to a successful entrepreneur, broadcaster, coach, or executive is not just a dream; it’s a reality for many who have walked in your shoes. With strategic planning and the right financial support, you can turn your athletic success into lifelong financial stability and growth.

Remember, the game doesn’t end when you leave the field; it simply evolves. Embrace the opportunities ahead and put the right team in place to guide you through every step of your post-career journey.

How We Can Help

Our dedicated Entertainment, Sports, and Media team has extensive experience guiding professional athletes through all phases of their career journeys. We offer comprehensive financial services tailored to help you achieve continued success. Reach out to our team today to discuss how we can support your post-career goals.

The post Beyond the Game: Charting Your Financial Path After Professional Sports appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• Athletes often face financial challenges despite lucrative careers due to mismanaging money or trusting the wrong people with their finances.
• Common risks that threaten athletes’ wealth include entourages, unqualified gatekeepers, and financial short-sightedness.
• Solutions to frequently seen financial pitfalls for pro athletes involve setting boundaries, seeking diverse advice, and adopting disciplined budgeting.

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It’s an all-too-common story: A talented athlete makes it to the big leagues and scores a life-changing payday only to watch their wealth slip away.

In some cases, it’s the result of overspending or poor financial planning. In other cases — like we recently saw with Los Angeles Dodgers star Shohei Ohtani (you can read MGO Entertainment, Sports, and Media Industry Leader Tony Smalls‘ perspective on that situation in this ESPN article) — it’s trusting the wrong people with access to your finances.

The reason we see the same story play out time and again in the world of professional sports is simple: athletes aren’t trained to look out for red flags or be proactive about protecting their money.

But just as you would prepare for an opponent before a big game or match, you need to be aware of the potential financial pitfalls you may encounter as a professional athlete.

The Five Biggest Dangers to Athletes’ Wealth

The warning signs that an athlete’s wealth is about to take a turn for the worse are easy to spot – because it happens in predictable ways. Lack of experience and betrayals of trust are enough to take down all but the strongest financial foundations. The biggest keys are to understand it can happen to anyone, and take the simple steps to avoid these issues.

1. The Entourage

Friends from the neighborhood latch onto the athlete and live the celebrity life while being a persistent drain on finances and a source of bad ideas. The athlete has promised to “take them out of the neighborhood/poverty,” but forgets that before they can help anyone else, they need to put the oxygen mask on themselves first. 

What to do instead: You can turn this potential risk into an asset. Take your crew out of the neighborhood but set them up to thrive. Whether through responsible small business loans, or education and career training, you can rise up together. 

2. The Gatekeeper

Far too frequently, a long-time friend or family member lacking financial expertise assumes the role of “The Gatekeeper” for the athlete. This individual often makes ill-informed business choices and monopolizes access to the athlete, shielding their finances from scrutiny and preventing anyone from uncovering potential negative consequences. 

What to do instead: Instead of relying on a single gatekeeper, assemble a roundtable of advisors AND meet with them together, as often as you can. Especially as significant financial decisions are being made. Carefully evaluate those you entrust with financial matters, considering both their motivations and competency in making sound financial decisions. If either aspect is lacking, guide them toward improvement or seek out individuals with the necessary qualifications and integrity. 

3. The Tantrum

When finally rewarded for the work and discipline required to become a pro, many athletes go through a phase of feeling they deserve anything and everything. When advised not to buy luxury items such as jewelry or cars, the response often is “who the hell are you to tell me what I can or cannot buy!?” Increasingly disastrous financial decisions inevitably follow. 

What to do instead: This one is on you. No one will ever truly understand what you’ve endured to achieve success, but you also have to keep one foot on the ground and understand how quickly you could lose everything you’ve worked for. The best path forward is to implement a budget with room to enjoy what you’ve earned that also has controls in place to ensure you’re building an unshakeable foundation for the future. 

4. The YES Men

When someone in the athlete’s camp gets fired for not agreeing with a bad decision, the professionals hired to protect their client (like the agent, business manager, or lawyer) may mitigate any conflict with the athlete to avoid getting fired — becoming YES Men. They would rather ride out the impending financial storm rather than tell the athlete what he or she actually needs to hear. Once there are only YES men around, the end is almost certainly near. 

What to do instead: Understand how getting different points of view on financial matters helps avoid financial hazards. Get into the habit of asking your team: “What could go wrong with this financial move?” The final decision is always yours, but there is tremendous value in advisors who feel confident sharing financial knowledge and experience, even when you don’t want to hear what you need to hear. 

5. Financial Myopia

Athletes can have a defective vision of their financial future. The average career span in the NFL is 3.3 years. In the NBA, it’s 4.5 years. The NHL is 5 years. And MLB is 5.6 years. Sure, pro players may earn a lot of money. But after paying agent’s fees, taxes, and shelling out for a luxury lifestyle, there isn’t much left to support the non-playing years. Some athletes may think they can pull off another miracle in overcoming all odds to maintain their lavish lifestyle, but the most common result is a broke athlete. 

What to do instead: Budgeting and planning are the keys here. Just remember it isn’t a “one or the other” situation. With the right mindset and approach, you can still live (relatively) large, while putting away enough to secure a future for yourself and your family. It just takes some self-control and a willingness to make the right decisions. 

Overcoming Financial Obstacles by Building a Winning Team

Many athletes come into a level of money at a young age that no one is truly prepared to handle. Lack of experience and betrayals of trust are enough to take down even the strongest financial foundations. This is why it is essential to choose a winning financial team. 

Too often, athletes split responsibilities between team members (frequently friends and family members), allowing them to operate in silos without any oversight. This sets the stage for financial trouble down the line. Instead, you need to build a team of professionals who work together, so you always have a system of checks and balances in place. 

Remember, true baller status comes when an athlete can live like a king for a lifetime, not just a couple years. When you build a trusted team, establish a plan, and follow it through, you can live comfortably long after your playing days are over. 

How We Can Help

With more than 30 years of experience working with athletes, actors, and music artists, our dedicated Entertainment, Sports, and Media team understands the unique financial challenges you face. Our team will help you build a financial foundation to achieve your goals both now and in the future. Reach out to us today to learn more.

The post 5 Financial Pitfalls Pro Athletes Can’t Afford to Ignore appeared first on MGO CPA | Tax, Audit, and Consulting Services.

• Agents and managers can help globally earning clients like professional athletes, musical artists, and entertainers strategically manage finances and taxes across borders to maximize earnings.
• For U.S. citizens and residents earning money abroad, key areas for advisors to address include endorsement deals, royalties, foreign properties, foreign tax returns, and tax structuring that considers foreign investments.
• For foreign (non-resident) athletes, artists, and entertainers performing in the U.S., considerations include but are not limited to U.S. taxable income, withholding rules, tax status, Central Withholding Agreements (CWA), and tax treaties.

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As an agent or manager for athletes, artists, and entertainers, many of your clients likely earn income across borders as they perform worldwide. Strategically managing their finances and taxes is crucial to maximize earnings. Proper planning can help reduce tax burdens and avoid double taxation across jurisdictions. This allows your clients to focus on their careers while you may finesse your assistance to them in optimizing their income with guidance from tax professionals.

Understanding key tax considerations can enable you to put frameworks in place to mitigate your clients’ liabilities. For clients who are citizens or residents of the United States earning money abroad, all worldwide income must be reported to the IRS. However, foreign countries also tax income earned by non-residents. Assessing relevant tax treaties and structuring contracts in an appropriate manner can lead to more advantageous tax treatment.

When your clients have income from various sources both from inside and outside the United States, proactive tax planning is key. Common international income types to consider include:

• Salaries from foreign leagues and tournaments
• Performance fees from concerts and festivals
• Royalties
• Endorsements and sponsorships
• Bonuses and prizes from international tournaments
• Merchandise sales
• Other income earned while playing or performing overseas

How these income types are classified and sourced impacts tax liabilities. Consulting tax professionals before your clients sign any deals allows for upfront planning that can keep more money in your clients’ pockets.

5 Key Considerations for U.S.-Based Athletes, Artists, and Entertainers Earning Income Abroad

If you are an advisor to musical artists, professional athletes, film actors, or other performers who are U.S. citizens, residents, or green card holders with foreign income sources, here are five important areas to address: 

1. Endorsement Deals – How will the construction of a contract impact tax treatment abroad? Will the income be considered U.S. or foreign sourced? What are some ways to proactively plan for potential tax savings?

2. Royalties – Can royalties be classified differently if content is published while clients are abroad? How are royalties affected by collaborations with international artists? Is it considered U.S. income if royalties are received while playing or performing abroad?

3. Foreign Properties – What are the tax rules surrounding your clients purchasing or renting homes abroad (rules may vary by country)? Did you know that foreign rental income may need to be disclosed on a U.S. tax return? How do investments in foreign countries get reported and taxed?

4. Foreign Tax Returns – When is return filing required for extended stays abroad? Can foreign taxes be credited (and is the credit dollar-for-dollar)? What should be expected for payments received as a contractor versus as an employee? Which expenses are deductible in each country? For example, are agent fees, travel expenses, and entertainment deductible?

5. Foreign Tax Structuring – Is it better to withhold taxes on gross revenues or after deductible expenses? How do local, state, and regional (provincial, cantonal, district, county) taxes factor in?

With these areas addressed upfront, you can maximize income and minimize overall tax burdens for your clients as opportunities arise.

5 Top Considerations for Foreign Domiciled Athletes, Artists, and Entertainers Performing or Playing in the U.S.

If you are an advisor to athlete, artist, and entertainer clients who are not residents or citizens of the U.S. but earn income in this country, areas that could have an impact on your clients’ taxes include (but are not limited to):    

1. U.S. Taxable Income – Is U.S.-sourced income taxable? What types of income may this include? Is there a requirement to file a U.S. federal income tax return? Is there an income threshold that must be met?

2. Withholding Rules – What are the withholding rules surrounding payments to foreign athletes, artists, and entertainers?

3. U.S. Tax Status – How is U.S. tax status determined — residency for income tax and domicile for transfer tax? How is taxation affected with or without a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN)?

4. Central Withholding Agreements (CWAs) – A CWA is a tool that can help entertainers and athletes who don’t live in the U.S. by having U.S. income tax withheld based on the non-resident’s income. Is a CWA beneficial for the individual’s situation?

5. Tax Treaties – Does the individual’s home country have a tax treaty with the U.S.? How does it impact tax liabilities?

Evaluating options surrounding tax statuses, withholding approaches, and applicable treaties can mitigate liabilities and optimize tax treatment for your foreign clients.

Work with Tax Professionals to Help Your Clients Maximize Global Income

As an agent or manager navigating global income for your clients, working with experienced tax professionals is key. Advisors can assess your clients’ situations across jurisdictions to put frameworks in place reducing liabilities and avoiding double taxation. With the right global tax strategy tailored to each client, you can position them to pursue worldwide career opportunities with maximum income and minimum taxes.

Need help navigating the world of international tax for athletes, artists, and entertainers? We have experienced professionals dedicated to both international tax and entertainment, sports, and media (ESM) ready to answer all your questions. Reach out to our International Tax Team today.

The post Top Strategies to Help Your Sports and Entertainment Clients Manage Global Taxes appeared first on MGO CPA | Tax, Audit, and Consulting Services.