Last week, famed PGA golf professional Phil Mickelson got himself into a bit of a PR nightmare by discussing how his income tax rates had increased dramatically and the impact it was likely to have on his professional and financial planning. As a resident of California he is subject to the new millionaire tax for that state, as well as the revised Federal tax rates that went into effect on January 1, 2013, resulting in a marginal tax rate of 63% on his earnings.
Lost in the resulting furor is the fact that professional golfers, most of whom make far more money on endorsement contracts than tour earnings, have available to them a technique called a structured celebrity endorsement program. These are very similar to structured legal fees, structured property sales and structured oil & gas lease bonus programs, but they have seen little use over the past five years as upper income tax rates were at historically low levels.
In this weeks edition of The Tax Law Channel and Speaking of Settlements, Mark Wahlstrom, President of Wahlstrom & Associates in Scottsdale, AZ, speaks with noted tax law expert Attorney Robert Wood on the use of these structured settlement products and how using a structured celebrity endorsement program could save people like Phil Mickelson a lot of money by pushing those earnings into future years.
You can learn more about these planning techniques by visiting Wahlstrom & Associates web site as seeing exactly how they work to reduce current taxable income and safely defer it to future tax years.