MLB Players: Are You Taking Advantage of This Tax Savings Strategy? 12/31 Deadline | Erik Averill, Travis Chick | MLB Players' Series

Feb 25 2022 • 15 mins

You have worked hard for your money, which is why it never feels good when you see how much you lose to taxes. Unfortunately, most players neglect ongoing tax planning, which results in paying more in taxes than they should.

Depending on your tax bracket, you can save paying 40% to 50% in taxes on a portion of your self-employment income (1099 income) or you can maximize the opportunity to grow your money tax free.

In this episode of the MLB Players’ Podcast, Erik Averill, CPWA®, CFP® and Travis Chick, CFP® break down everything you need to do before the December 31st deadline.

If you can answer no to any of these questions, you are missing out.

Has your CPA® prepared a year-end tax projection showing you the projected taxes you will pay or be refunded for 2020?
Have you opened an Individual 401(k) by December 31st?
This is NOT your MLB Vanguard 401(k)?
Has your Certified Financial Planner implemented the Back-Door Roth IRA Strategy?

Most Common Mistake We See

Log-in to your account, do you have a SEP IRA?

The most common mistake we see is the recommendation to open a SEP IRA. This is a great tool for the mass affluent. However, if you are in the highest tax bracket it is not ideal for you. If you have a SEP IRA, it is a red flag that you advisor does not have the specialized expertise you need.

Limitations of the SEP IRA
The type of contribution you make (Roth or Traditional)
The amount of contribution you make (excludes an employee option)
Violates IRA aggregation rule, preventing the Back-Door Roth IRA strategy which limits your ability to grow your money tax free

Episode Highlights