Mickelson Causes Tax Controversy Over His Tax Rate
With the New Year underway we are all feeling the effects of the tax changes, even professional golfer Phil Mickelson. Over the weekend, he made a bold statement saying that the recent tax hikes on the rich may “force him to make drastic changes” implying that he might be leaving golf or his home in California. Because he is a public figure, this tax controversy was brought to the forefront of the evening news.
Mickelson’s biggest complaint with his taxes is that he pays an approximate tax rate of 62-63 percent and he feels that the taxes are taking too much of his income. While most of us do not pay such a high tax rate, several accountants believe that Mickelson is actually paying closer to 50 percent.
When considering his numbers this is what he pays:
- 13.3 percent in state income tax
- 39.6 percent for federal income tax
- Medicare is 2 percent
- Self employment taxes 15.3 percent up to $113,000 and then the rate is 2.9 percent.
- Mickelson would pay an additional one or two percent for local taxes where he plays in tournaments and collects prize winnings.
This all together is a lot for anyone to pay, but Mickelson probably has a tax plan in place to help with basic deductions. His golf expenses could be classified as a business expense, and he probably has money put into a retirement account, which would help lower his tax rate.
Most of us won’t have this type of salary to contend with, but if you do have tax problems or are being audited, it’s a good idea to consult with an experienced tax attorney. They understand the complexities involved with tax law and can review your case and provide you with options.
Mickelson later apologized for discussing his personal finances in public.
Source: NBCNews.com, “Mickelson likely pays less taxes than he thinks,” Robert Frank, Jan. 22, 2013