Taxes are one of the biggest destroyers of wealth.

Misconceptions about taxes are everywhere, and you often hear many of them daily. Below are a few examples we often hear:

• Getting a large tax refund is always a good thing
• My CPA did a good job if I got a bigger tax refund
• April 15th is the most important date in the tax world
• “Tax Planning” and “Tax Filing” are the same thing

Now for some truths that everyone should understand:

• You actually want to get back $0 or owe money (not penalties and interest) when you file your taxes
• December 31st of the prior year is the most important date in the tax world
• Tax Planning is done throughout the year and has a major impact on what happens when you file your taxes
• Being reactive when it comes to taxes can cost you thousands (sometimes millions) of dollars throughout your lifetime
• You should have a Family Office that throughout the year proactively integrates your Tax Planning with your Financial Plan

Residency, 1099 income, MiLB 401ks, team assignment, contract language, duty days; your situation is unique, and the complexities you face are different than most people. Luckily, there are answers available if you start your Tax Planning now. If you have questions about your situation or would like a free consultation, please text or call one of our Private Wealth Advisors to help you know what your next steps should be.

Travis Chick – (903) 714-7951

Josh McAlister – (505) 239-5488

Will McGuffey – (225) 326-0992

MLB teams will be interested in your gross signing bonus.

Your agent will be paid based on your gross signing bonus.

You should be focused on your NET SIGNING BONUS.

Your net signing bonus is what you will have in your pocket after taxes. This is the amount of money that you will be able to invest in your career, grow your wealth, and spend on the things that are important to you and your family.

To put into perspective why you should focus on your net signing bonus, you can look to a client we worked with in advance of the 2021 MLB Draft. In the months leading up to the draft we proactively worked with the player, his family, and their agent to break down all scenarios, taxes, residency, and contract language so they were prepared and fully understood what different gross signing bonuses meant to them after taxes.

The result ----- Even though this player had a gross signing bonus of more than $1,000,000 less than the highest bonus in the Draft that year, this player ended up with the highest after-tax signing bonus of any player.

Whether the player would sign or not hinged on the language of the contract and how the player’s bonus would be taxed. This was financial advice that they received before the draft that led to $700,000 more being put in his bank account after all taxes and agent fees were paid. The family was educated and prepared for draft day and knew the decision they were making and why.

They won; other players who were not as prepared permanently lost money.

Educate yourself, hire the right team of experts, and maximize your opportunity!

On this week’s episode, we’re honored to be joined by Todd Seigler, father of Anthony Seigler – a first-round draft pick with the New York Yankees. We get to hear from Todd on what the draft process was like from the perspective of family members and in working through these areas together as a family.

As a parent going through the draft process, it can feel like everybody is painting a rosy picture about how perfect your son’s game is – it can be hard to sift through all the feedback using data to separate out sales pitch from reality. There are also challenges in setting good boundaries to maintain family bonds and help to make intentional decisions about the long-term future that don’t rely solely on emotions or chasing shiny things.

Todd offers a lot of helpful insight into this process and throughout the episode, he covers topics such as:

• Going through the draft process from scouting during senior year season to draft day
• The potential of getting distracted by the wrong things that can seem like really good things
• How to have good family conversations to set healthy boundaries
• The importance of staying faithful and committed to your routines
• Avoiding “Draft intoxication”
• How they handled choosing the right people in their inner circle
• What was a draft day like for a family
• What the transition to pro has been like
• Looking back, what things he wishes he would have known going through the process as a parent