As Kevin Durant Sets Out to File 20 Different Tax Returns, $40,000,000 QB Patrick Mahomes Gets Bogged Down by Infamous ‘Michael Jordan Tax’

Chiefs quarterback Patrick Mahomes is one of the highest-paid athletes in the NFL. His wealth accumulation comes with plenty of strings attached. The most important one is the array of complicated taxes he is liable to pay in every state he plays. According to reports, the gunslinger will have to file seven income tax returns this year.

The Texas product was enshrined on the list of highest-paid quarterbacks in 2020 after he signed a 10-year, $450 million deal with the franchise. His source of income is not just restricted to the NFL salaries but also the endorsement campaigns he gets featured in. Being a celebrity, Mahomes happens to be the face of several brands across the country and harvests a major chunk of his wealth.

Patrick Mahomes is entangled in tax liabilities

There is a concept called the Jock tax for athletes playing in the NFL, NBA, and MLB. It was started in 1991 when Michael Jordan and his Bulls defeated the Lakers in the NBA finals.  As per Joe Pompliano (sports investor), these are some of the most complicated taxes, encountered by players. They often hire smart accountants to handle their wealth and file tax returns smoothly.

“The “Jock Tax” became famous in 1991. Michael Jordan and the Chicago Bulls had just beaten the Los Angeles Lakers in the NBA Finals.” Pompliano tweeted.

“But after the championship parade, MJ’s accountant received a notice from California saying MJ owed $10,000 in taxes for the games he played in LA,” he added. Initially, it was claimed that LA was mad at Jordan’s victory and levied unnecessary taxes; however, there were predefined rules and regulations. Apparently, fans didn’t know about it. Since the very incident, players have had to contribute a small chunk of their salaries as state taxes.

Interestingly, Mahomes was caught under the radar for filing 7 tax returns in a single year. Likewise, NBA superstar Kevin Durant has to file 20 returns in different states and counties. There were several instances, where players had actually paid $1 million in taxes, and it appears Mahomes is next on the line.

Other athletes who faced a similar situation

The concept of the Jock Tax is enforced in almost every state except, Florida, Nevada, Texas, Washington, and Tennessee. However, some cities like Kansas, Cleveland, Philadelphia, and Detroit are already covered under this policy. As a result, players like Mahomes become eligible for these liabilities.

Meanwhile, some prominent names caught headlines for paying hefty taxes, including Tyreek Hill. His decision to choose Miami over the New York Jets was one of these reasons.

According to reports, he saved almost $2.7 million in taxes last year and will make $10 million in the next three years. Boxer Floyd Mayweather employed a similar strategy, where he saved around $20 million from 2007 to 2017 despite playing in Las Vegas for an entire decade.