Posted on 01/05/2005 3:28:25 PM PST by Ethrane
If Beltran is looking to save a couple hundred thousand dollars, he also might want to sign before Jan. 12 and load up his contract in signing bonus money. That's because a 46-year-old loophole on signing bonuses will be closing next Wednesday.
For the rest of the American public, signing bonuses count as wages earned, with both the employer and employee having to pay taxes under FICA (the Federal Insurance Contribution Act). But in 1958, baseball players -- the exclusion for other athletes later became understood -- were exempt from FICA taxes on their signing bonuses because it was determined that no service was technically rendered for the player's bonus.
(Excerpt) Read more at sports.espn.go.com ...
As far as:
were exempt from FICA taxes on their signing bonuses because it was determined that no service was technically rendered for the player's bonus.
If they're not performing a "service", why would anyone give them a bonus? What kind of BS is that?
Glad they're closing the loophole, but I'm tempted to ask for FICA taxes I've paid on bonuses over the past 12 years....
Now Now You are not part of the priveleged class.
Seeing how FICA is only paid on the first $90,000 or so of income, why is this an issue at all?
This is true for the Social Security portion, but I don't believe there is a limit for the Medicare portion.
Because there is NO CAP on the Medicare portion. So 2.9% of ALL earnings are subject to tax.
That is correct....there is no cap to the medicare portion.
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