So by now we all know that Lebron James has decided to play for the Miami Heat. Florida has no state income tax. Ohio does. How much will he save by becoming a Florida resident?

There have been no specifics as I write this about how much his contract will pay him. I also cannot speculate on how much income he receives from other sources such as endorsements and merchandising rights. For our purposes, let’s assume he will receive twenty million dollars per year, for the next five years.

Ohio state income tax, at the current rates, on twenty million amounts to $1,248,000 per year. Over the course of five years, that’s a whopping $6,240,000. This is just on his income from playing basketball. The amount he will save by becoming a Florida resident on his other income could be tens of millions, so in a way he could end up keeping more than he would have by staying with the Cavaliers and landing a bigger contract.

As always, call us if you have any questions.

Jon Majkut, CPA

Majkut CPA’S, Ltd