There’s a long-standing myth in overseas basketball that your salary is tax-free. Let’s go ahead and kill that lie once and for all—because it’s TOTALLY false. Maybe back in the early days of overseas hoops, players got away with it, but in today’s world, Uncle Sam and European tax offices are always going to get their cut.
How Taxes Work Overseas
In many European countries, your taxes are deducted directly from your salary each month, and your team handles the payments to the tax office. But that doesn’t mean you aren’t paying taxes. You just don’t see the money before it’s taken out.
For example, players in Germany may actually be eligible for a tax refund depending on how long they worked in the country. This is why it’s critical to learn the tax laws wherever you play—because there may be benefits you’re missing. The best move? Find a tax specialist in every country you hoop in.
The U.S. Still Wants Its Share
Even though you’re earning money abroad, you still owe U.S. taxes. The IRS offers a Foreign Earned Income Exclusion, which allows you to exclude up to $104,000 from U.S. taxes (as of now). But anything you earn above that amount? Taxable.
And it doesn’t stop there. You might also owe state income tax depending on where you live. Only seven states don’t tax income:
-Alaska
-Florida
-Nevada
-South Dakota
-Texas
-Washington
-Wyoming
If you live in any other state, they might still come knocking for their share. Some players set up businesses in tax-friendly states to reduce their liability, but that’s something you need to plan for before tax season.
Avoiding Tax Nightmares
Here’s what every overseas hooper should do right now to stay ahead of tax season:
–Keep every single tax-related document from your team and country—don’t wait until you’re home to ask for paperwork, you’ll never get it!
–Find a tax professional who understands foreign income and has experience with athletes.
–Be honest with your filings. Trying to cut corners will cost you way more in penalties if the IRS catches up with you.
At the end of the day, staying informed and organized will save you thousands of dollars and a major headache later on. Overseas basketball is already a grind—don’t let tax troubles make it harder.
Need help with the process? DM me or hit the link in my bio to book a consult. Let’s get you set up for success.
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