Posted on 07/18/2024 12:51:38 PM PDT by nickcarraway
Caleb Williams has finally signed his rookie contract with the Chicago Bears. What took so long? Williams’ representatives were reportedly making some unprecedented requests for his contract before he put his name on the dotted line.
Williams was still participating in rookie and team activities, but he hadn’t signed his four-year, $39 million deal with the Bears until earlier this week. According to Pro Football Talk, there were differences in the language of Williams’ contract, including one odd request I don’t think I’ve ever seen a player make.
Per Mike Florio, Williams requested that his contract be paid in the form of an LLC, or to make his contract a forgivable loan. What both of these would accomplish, you might ask? They would keep him from paying taxes to the state of Illinois. In Illinois, LLCs have zero income tax filing requirements, and to make his deal a forgivable loan, he wouldn’t have to pay taxes on his deal until the loan was forgiven, “up to 10 years in the future” according to Florio.
The Bears took both requests to the NFL, because there’s nothing in the rules that says this can’t happen. The NFL disagreed, saying William’s money can’t go to a business entity other than the player, per Florio. There was no reason given for why the league axed the idea of a forgivable loan.
Honestly, I would ask for the same thing. Taxes stink, and if there’s any way to legally avoid said taxes I would find any way to. This is pretty genius by Williams’ camp, just to even float that possibility. No other player has asked for this before, but I bet you more will start to ask after Williams did.
That being said, it would be incredibly funny to hear a Sunday Night Football intro for a Bears game, and Williams says “Caleb Williams, LLC.”
NFL does not want to deal with IRS issues.
Move to Florida and you don’t have any State income taxes...........
He got drafted by the Bears, what can he do?
Being the product of an LLC is way better for tax purposes.
Not much. Sports players have to pay taxes in every state they play in and sometimes even the city...............
Actually seems like a smart move. I’m sure the tax rate in Illinois is sky high.
He must have heard the guy on the radio that has a finance talk-show. He’s been touting something similar to this. Said some CEOs of major corporations are getting paid like that................
“it would be incredibly funny to hear a Sunday Night Football intro for a Bears game, and Williams says “Caleb Williams, LLC.”
That would be hilarious.
Most entertainers do this already, they incorporate and then license out their services via the LLC, which allows them write off a lot of their costs as business expense.
If it isn’t against their stated laws, it should be allowed. The NFL wouldn’t be involved with the IRS. The Bears pay the player.
“Being the product of an LLC is way better for tax purposes.”
Not really. The LLC is a non-recognised entity for tax purposes and does not shelter any income, assuming it is a 1 person LLC.
Thus all income is taxable on his personal return.
If he has multiple owners of the LLC, then it files as a partnership. He would then need to prove it was not assignment of income ot it would be automatically disallowed.
All this is true unless he changes his name to Biden.
He gets regular union employee protections and is participating under the terms of the league with the union. An LLC could be seen illegal as is paying an employee under your close control on a 1099. And the forgivable loan? That sounds like massive tax evasion all around.
Ahhh. OK. What about a family trust?
The NFL doesn’t have rules against it.
Is Hunter Biden his tax attorney?
There is something squirrelly about Caleb Williams.
They’ve got a contract with the union as to how players are paid, and I’m pretty sure there aren’t any LLCs or forgivable loans in that.
But you can’t work as an employee — and be paid as if you were a contractor.
—> Not really. The LLC is a non-recognised entity for tax purposes and does not shelter any income, assuming it is a 1 person LLC.
An LLC can choose to be taxed in several forms (ex. S Corp or corporate form), as well as operate as a disregarded entity.
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