(How to keep more, protect more, and build what lasts.) If you're an athlete, your career will move faster than most people’s lifetime. Your earning years start earlier. Your peak is shorter. And your transition out of the game? It usually happens while your peers are just starting to hit their stride. That’s why your approach to wealth has to be different. It has to be smarter, more disciplined, and designed around your real timeline — not the one most people follow. At Moment Private Wealth , we often break down an athlete’s financial life into three distinct phases : Foundation : When the money starts coming in. Peak : When you’re earning big and playing at the highest level. Impact : When the game changes — and you start thinking bigger than yourself. Each phase requires a different mindset and a different plan. Here's how to think through each one — and how to avoid the common traps that can derail even the most talented pros. Phase 1: Foundation (Where most mistakes happen.) This phase starts when the income begins to show up — NIL deals, rookie contracts, first bonuses. For many athletes, it’s the first time real money is hitting the account. And that’s where the danger starts. What you should focus on: Building your financial base  — not your lifestyle. Protecting yourself  from the unexpected: injury, lawsuits, bad deals. Learning the basics : taxes, budgeting, and knowing what “after-tax” really means. Assembling your team : financial advisor, CPA, attorney, and someone you trust who’s not afraid to tell you no. What to avoid: Spending like it’s forever. (Spoiler: It’s not.) Assuming a deal is done before the check clears. Letting friends, agents, or brands pressure you into financial decisions. Waiting too long to build habits — lifestyle creep is real and hard to reverse. At this stage, the biggest wins come from what you don’t  do. Don’t overextend. Don’t assume. Don’t wing it. If you can stay disciplined in Phase 1, you’ll give yourself room to grow in Phase 2. Phase 2: Peak This is when you’re at your earning high point. Contracts are bigger. Deals are more complex. Everyone wants to be in your inner circle. This phase can be incredibly rewarding — and incredibly risky. Because the faster the money comes in, the easier it is to lose track of where it’s going. What you should focus on: Sustainable growth  — not just fast returns. Strategic diversification : real estate, equity, business interests, passive income. Advanced tax planning: strategy, structure, and types of income. Structuring your lifestyle  around cash flow , not net worth. This is also the time to start preparing for the next phase — even if it feels far away. What to avoid: Making emotional investment decisions. (Friends don’t always make good business partners.) Buying liabilities that look like assets. Forgetting that endorsements, sponsorships, and playing time aren’t guaranteed forever. Ignoring estate planning — especially if you have kids or are supporting family. Your goal in Phase 2 isn’t just to grow your money. It’s to build options . And the best time to do that? When things are going well. Phase 3: Impact (Where the real wealth is built). This is where the game changes. Maybe you’ve retired. Maybe you’ve stepped away from pro sports or pivoted into something new. Regardless of how you got here, the priorities shift. In this phase, the income slows down — but the opportunities open up. What you should focus on: Replacing active income  with income-producing assets or business ventures. Protecting your downside : lower risk, lower fees, lower drama. Maintaining a smart lifestyle  that your post-career income can support. Defining your legacy : not just financially, but through what you build and give. This phase is also where identity  becomes a huge factor. We’ve seen it time and time again — the mental transition can be just as challenging as the financial one. What to avoid: Hanging on to old spending patterns with new income levels. Selling assets under pressure. Trying to “prove you’re still winning” with risky ventures. Losing track of the long game. Wealth isn’t what you make. It’s what you keep — what you build and the impact you have. The athletes who win in this phase are the ones who prepared before they had to. Why This Matters More Than You Think Athletes operate on a compressed financial timeline . You start earlier, earn more, and exit faster than just about any other profession. Which means there’s less room for error. One bad investment. One contract dispute. One year of unchecked spending — and you’re starting over. But when you treat your wealth journey like a career — with training, strategy, and accountability — the odds shift in your favor. Big time. These 3 phases are just the beginning of your financial journey. Wealth Management for Professional Athletes doesn't happen overnight. But if done right on the upfront, you will be better off than 99.9% of your teammates. ___________________________________________________________________________________________________________ If you are an athlete and want to better understand how to manage your wealth, schedule a call with a Moment Founder . Not sure what questions to ask, check out this video on 10 questions you should ask when interviewing a financial advisor. Get in Touch With An Advisor Frequently Asked Questions Here are some answers to questions I received frequently about this topic. How do I know if I have the right team in place?    It starts with asking the right questions. "How will you help me reach my goals? Who else have you worked with? How have you helped athletes just like me?" They need to be able these questions with direct answers. How do I know which phase I am in?   Start by asking: Where is your income coming from, and how stable is it? Are you still building your foundation, maximizing peak earnings, or transitioning into a new chapter? The phase you're in shapes the financial decisions you should be making right now. What’s the most important move I can make in my current phase? It depends on where you are. In Foundation, it's about protection and habits. In Peak, it’s about planning for life after the game. In Impact, it’s about sustainability. Each phase has its own set of priorities — knowing yours is the first step. Can I skip a phase if I am already earning big money? No — and skipping the Foundation phase is one of the biggest mistakes we see. Even if you're making great money, you still need the basics in place: cash flow plan, protection, and a smart team around you. What is the first step I should take?    Set up a call with a financial advisor at Moment Private Wealth who specializes wealth management for professional athletes. ___________________________________________________________________________________________________________ *Moment Private Wealth offers information on tax and estate planning that is general in nature. Tax and Legal advice are not provided by Moment Private Wealth. Consult an attorney or tax professional regarding your specific legal or tax situation.

The biggest financial mistakes most MLB Draft picks make have nothing to do with baseball. They don’t come from strikeouts, slumps, or stat lines. They come from what happens off the field — and when they make their first financial decisions. And almost all of it comes down to one choice: They wait to hire their financial team. MLB Draft Window For most players, Draft Day feels like the finish line. But financially, it’s the starting block. Those first 30 days are when the most important decisions get made: Where you establish residency. How your signing bonus is structured. When you fund retirement accounts. Who you trust to guide you through it all. Get those moves right, and you build a foundation for decades of growth. Get them wrong, and you can fall behind before you make your professional debut. Want a full breakdown of how the MLB Draft works? Read The Moment Guide to the MLB Draft. Here’s a real example of how timing can change everything. The difference shows up fast — and it starts with when you build your team. Pre-Draft vs Post-Draft: The Real Difference Before we dive into the numbers, let’s bring this to life. Every year, we see talented players step into the draft with similar tools, similar upside, and similar financial opportunities — but end up on completely different paths based on how early they build their team. The contrast is striking, and it comes down to one thing: timing. These two players entered the same draft, were both top 50 prospects, but made their decisions on very different timelines. One brought us in early — well before their first dollar ever hit the account. The other waited until after the draft, when the opportunities for proactive planning were far more limited and felt rushed. This one difference in timing created two very different financial futures. 🟢 Player A: Hired Early and Planned Ahead What We Planned for Ahead of Time: Established residency in a no-tax state before signing Coordinated contract structure with their agent and financial team Contributed to a Solo 401(k) and MiLB 401(k) early Ran full tax projections before their first tax season Set up banking, payroll, and legal protections from Day One Impact of Early Planning ~ $130,000+ in total savings ~$100,000+ from state tax savings ~$25,900 from Solo 401(k) tax benefits ~$8,700 from MiLB 401(k) contribution Result:  Player A started their career with structure, clarity, and momentum. They had their tax strategy, cash flow plan, and savings vehicles in place before they even stepped foot on the field — which meant they could focus entirely on baseball. 🔴 Player B: Hired Late and Played Catch-Up What Couldn’t Be Planned and Implemented in Time: Missed residency window → taxed as a resident of a high-tax state Missed opportunities to optimize payment timing and terms No retirement contributions in Year One Tax planning was reactive instead of proactive Managing avoidable issues instead of enjoying a huge payday Cost of Waiting ~ $180,000+ in lost opportunities Extra state taxes paid Missed Solo and MiLB 401(k) tax savings Result:  Player B followed a comparable path with comparable upside — but was already playing financial catch-up. Instead of building wealth, they were scrambling to fix costly mistakes from day one. Their careers started the same, but their planning didn’t — and the results show it. When MLB Draftees Should Hire a Financial Team That gap wasn’t about talent — it was about timing. Draft picks assume they’ll have time to figure it all out later. But many of the biggest financial levers can only be pulled before your bonus hits or within the first few weeks of signing. If you miss them, they’re gone — and they don’t come back. Something to consider is also knowing the details around your signing bonus. Lucky for you, we have you covered: MLB Signing Bonus Explained: A 1st Rounder's Story Here’s why early planning changes everything:  Residency Planning Where you live when you sign your contract determines which state claims income tax on your signing bonus. For high-tax states, that can mean 10%+ of your bonus is gone before you touch it. If you wait until after signing to move, you’ve already missed the window. Contract Structure Coordination MLB teams can structure signing bonuses across different tax years. That affects which tax bracket you land in and how much you owe. Without planning, players often receive their bonus in a way that maximizes their taxes instead of minimizing them. Retirement Contributions Solo 401(k)s and the MiLB 401(k) are powerful tools to reduce taxable income and start compounding early. Waiting means you lose an entire year of contributions, growth, and tax savings — and the IRS doesn’t let you retroactively go back. Legal & Insurance Protections Disability insurance, liability coverage, wills, and POAs protect your career and your family. They’re easiest and cheapest to get before   there’s a problem. Once something happens, it’s usually too late. Players who hire early don’t just save money — they gain clarity, control, and peace of mind. They step into their pro careers prepared, not panicked. The First 90 Days Most draft picks think of their signing bonus as a reward. The best ones treat it as seed capital. It’s the only time in your life where you can convert a single check into lifelong financial security — if you plan for it. Instead of asking: “What can I afford now?” Ask: “How do I turn this into long-term wealth?” That’s what separates the players who are broke five years after retiring from the ones who never have to work again. Here’s what an early team will actually do before your first game: Residency planning and documentation — to establish tax domicile and maximize state tax savings. Tax projections and withholding setup — to avoid surprises and plan cash flow around what you’ll owe. Retirement account contributions — Solo 401(k) and MiLB 401(k) to reduce taxable income and jumpstart compounding. Contract structure review — to align bonus payouts and salary timing with your tax strategy. Legal and insurance protections — disability, liability, and estate documents — should be in place before they’re ever needed. Budget and cash flow strategy — to manage living costs, training expenses, and savings goals with clarity. This structure gives you clarity, confidence, and control — instead of scrambling because you didn’t plan ahead. The Cost of Waiting Waiting isn’t neutral — it’s expensive Surprise tax bills — from missed projections and poor withholding. Lost state tax savings — by missing the residency window. Missed retirement contributions — delaying compounding and long-term growth. Unfavorable contract terms — from uncoordinated bonus and salary structures. Financial stress and distractions — instead of clarity and focus on the field. By the time most players finally call for help, they’ve already lost opportunities they can’t get back. Key Takeaways Hiring a financial team early isn’t overhead — it’s leverage.  It protects what you earn and multiplies what you keep. The most expensive mistakes happen in the first 30 days.  Once they’re made, they’re hard or impossible to undo. Waiting doesn’t save you time — it costs you money.  The earlier you build the foundation, the further you get ahead. The Bottom Line If you’ve just been drafted — or expect to be soon — now is the moment to build your financial team. Don’t wait for check-cashing or tax season surprises. Let’s run your numbers, map your strategy, and help you keep more of what you earn. Schedule a call with Moment Private Wealth today. We specialize in turning draft victories into lifetime financial wins. Get in Touch With An Advisor Frequently Asked Questions Here are some answers to questions received regarding athletes and money: When does Moment start working with future MLB draftees? We start working with families often a year before the MLB draft. Our goal is to ensure every family is educated on their options and can enjoy the draft when it comes. Does Moment help players with state residency? Yes, Moment has a checklist we walk every player through to ensure they are compliant in navigating state residency. How does Moment work with my agent? Moment works with every major sports agency, and that collaboration ensures all of our athletes maximize not just their signing bonus but their career earnings. Does Moment provide tax planning and strategy for MLB draftees? Yes, we handle all of our athletes' tax planning and team coordination. As part of your team at Moment, you will be working with a sport-specific CPA firm specializing in navigating everything that comes with athlete taxation.   *Moment Private Wealth offers information on tax and estate planning that is general in nature. Tax and Legal advice are not provided by Moment Private Wealth. Consult an attorney or tax professional regarding your specific legal or tax situation.

Tax deductions are one of the most powerful tools business owners have to legally reduce taxable income. Whether you’re just starting out or running a 7-figure operation, knowing what you can write off—and how to do it right—can save you tens (or hundreds) of thousands of dollars a year. In this guide, you'll learn: What counts as a tax deduction in 2025 Which expenses business owners can (and can’t) write off A real-world, 7-figure example with detailed tax savings The answer to the question we are frequently asked by business owners like you. What Is a Tax Deduction? A tax deduction reduces your taxable income, which lowers the amount of income that gets taxed. Example: If your business earns $1,000,000 in gross revenue and you deduct $400,000 in expenses, you're only taxed on $600,000. To be deductible, the expense must be: Ordinary  — common in your industry Necessary  — useful for your business operations What Business Expenses Are Deductible in 2025? Can I deduct my home office? Yes, if it’s used exclusively and regularly for business. You can deduct a percentage of: Rent or mortgage interest Utilities Internet Repairs Can I deduct business meals? Yes. In 2025, you can deduct 50% of meals that are business-related, including: Client lunches Travel meals Staff celebrations Can I deduct business travel? Yes. You can write off: Flights Hotels Rental cars/Ubers 50% of meals while traveling Can I deduct my car expenses? Yes. You can choose between: Standard mileage rate (TBD for 2025, but was $0.67 in 2024) Actual vehicle expenses (gas, insurance, depreciation) Can I deduct software and tools? Yes. Tools like CRMs, accounting software, design platforms, and project management apps are all deductible if used for business. Can I deduct advertising and marketing? Absolutely. Common deductible marketing costs: Paid social ads SEO services Influencer marketing Branded content Sponsorships Are wages and benefits deductible? Yes. Employee salaries, payroll taxes, health insurance premiums, and retirement plan contributions are all tax-deductible business expenses. Are contractor payments deductible? Yes. Payments to freelancers, consultants, or 1099 contractors are fully deductible if for business services. Can I deduct education and training? Yes, if it improves your skills or helps maintain your business. Examples: Certifications Business courses Industry conferences Can I deduct startup costs? Yes. You can deduct: Up to $5,000 in the first year The rest amortized over 15 years Are bank fees and interest deductible? Yes. This includes: Credit card processing fees Business loan interest Bank service charges Real-World Example: Tax Strategy for a $1.3M Business in 2025 Business Profile: Boutique Marketing Agency Owner:  Danielle Business Structure:  S-Corp Location:  Austin, TX Gross Revenue (2025):  $1,300,000 W-2 Salary (Danielle):  $160,000 Team:  5 full-time employees + contractors Deductible Expenses Category Amount Salaries & Wages $420,000 Payroll Taxes $35,000 Health Benefits $28,000 Contractor Payments $96,000 Office Rent $48,000 Software & Tools $12,000 Marketing & Lead Gen $39,000 Business Travel $21,000 Legal + Accounting $16,500 Equipment (Sec. 179) $23,000 Utilities + Internet $6,000 Insurance (General + Cyber) $7,800 Education & Training $5,400 Business Meals (50%) $3,750 Home Office (Accountable Plan) $3,600 Total Deductible Expenses:  $771,050 Retirement Strategy: Maxing Out the Solo 401(k) Danielle contributes the maximum allowed in 2025: Contribution Type Amount Employee deferral $23,500 Employer contribution $46,500 Total Contribution $70,000 Additional Tax Strategies Used Strategy Amount Deducted / Saved Section 179 Equipment $23,000 Solo 401(k) $70,000 Accountable Plan $3,600 R&D Tax Credit $14,000 (credit, not deduction) Taxable Income Calculation (After Deductions) Gross Revenue: $1,300,000 Business Deductions: $771,050 401(k) Deduction: $70,000 Accountable Plan (home office): $3,600 Taxable Income: $455,350 R&D Credit: –$14,000 (direct tax reduction) Federal Tax Comparison: With vs. Without Deductions Scenario Taxable Income Est. Tax (32%) Less R&D Credit Final Tax Owed No Deductions $1,300,000 $416,000 — $416,000 With Deductions $455,350 $145,712 –$14,000 $131,712 Total Tax Savings: $284,288 Real-World Example 2: Solo E-Commerce Seller (LLC) Business owner:  Mariah Business type:  Single-member LLC (Schedule C) Gross revenue:  $220,000 (Shopify + Etsy sales) Products:  Handmade skincare No employees Deductible Expenses Category Amount Cost of goods sold $65,000 Packaging + shipping $11,000 Software + e-commerce tools $4,500 Marketing (Facebook, IG ads) $18,000 Product photography + branding $2,000 Home office (15% of rent/util) $3,000 Phone + internet (80% bus use) $1,600 Equipment (label printer, desk) $2,500 Education (YouTube ads course) $1,200 Health insurance (self-employed) $4,200 Business travel (2 trade shows) $3,600 Total deductions:  $116,600 Solo 401(k) Contribution Mariah netted about $100,000 after deductions. She contributed: $23,500 employee deferral $18,000 employer contribution (approx.) Total retirement deduction:  $41,500 Tax Summary Revenue:  $220,000 Total deductions:  $116,600 + $41,500 = $158,100 Taxable income:  $61,900 Estimated federal tax (22%):   $13,618 What Can’t You Deduct? Some common expenses are not  deductible, including: Personal expenses (unless allocated properly) Clothing (unless uniforms or protective gear) Fines and penalties Political contributions Social or athletic club dues Frequently Asked Questions Can I deduct business expenses if I don’t have an LLC? Yes. Sole proprietors and freelancers can deduct business expenses on Schedule C of their personal tax return. You don’t need an LLC. What records should I keep to support deductions? Keep: Receipts Invoices Mileage logs Bank/credit card statements Notes describing the business purpose Maintain documentation for at least 3 years . Can I deduct business expenses paid from my personal account? Yes. As long as the expense was 100% business-related, it’s deductible.But it’s better to use a dedicated business account or card for clean record-keeping. How do I deduct partial-use items (like a phone or car)? Deduct only the business-use percentage . Example: If you use your car 70% for business and total expenses are $10,000, you can deduct $7,000. Is my own pay deductible? Sole Proprietor or Single-Member LLC:  No. Owner draws are not deductible. S-Corp/C-Corp:  Yes. Wages you pay yourself through payroll are deductible. What if I get audited? As long as your records are organized and the deductions are legitimate, you're fine.Most audits are triggered by: Excessive deductions Inconsistent income reporting Poor recordkeeping Can I amend a previous tax return to claim missed deductions? Yes. Use Form 1040-X to amend a federal return.You have up to 3 years  from the original filing date. Can I deduct losses from a business that didn’t make a profit? Yes. If you show a true profit motive, the IRS allows deductions—even with losses. But if you report a loss 3 out of 5 years, the IRS may treat it as a hobby. What tax deductions do most business owners miss? Home office Section 179 equipment Health insurance (self-employed) Augusta Rule (rent your home) Solo 401(k) employer contributions Mileage for local business errands Can I deduct clothing or personal grooming? No—unless it’s a uniform or protective equipment  required for the job.Regular clothes, even if worn for work, are not deductible. Are gifts to clients deductible? Yes, but limited to $25 per person per year . Branded swag may qualify separately under marketing. What if I run multiple businesses? You must keep separate records  and only deduct expenses specific to each business.Some shared costs (like your phone) can be allocated proportionally. Can I pay my kids and deduct it? Yes—if they perform real work , you can pay them a reasonable wage: Under 18: No payroll taxes (if sole prop or partnership) Deductible as a business expense Great way to fund their Roth IRA or 529 plan. Business Tax Deductions Checklist (2025) Fixed Expenses Office rent Utilities, internet, phone Software subscriptions Insurance (liability, auto, cyber) Variable/Strategic Expenses Marketing & advertising Business travel Equipment purchases Education & training Labor Costs W-2 employee wages Payroll taxes Contractor (1099) payments Owner retirement contributions Home-Based Business Home office Rent under the Augusta Rule Partial utilities/internet Furniture/equipment Financial/Admin Legal & accounting fees Bank fees Credit card processing Business loan interest Final Thoughts: Deductions Are Growth Tools Tax deductions aren’t just about lowering your bill. They’re about: Keeping more capital in your business Reinvesting in growth Funding things like retirement and hiring Lowers your tax bill Increases reinvestable profit Supports long-term planning (hiring, scaling, saving) The better your tax strategy, the faster your business scales—legally and profitably. And if your tax pro isn’t walking you through all of these opportunities?It might be time for an upgrade. Bonus Tip: Work With a Proactive Tax Advisor Most business owners work with a tax preparer who files returns after the year ends. That’s reactive. What you need is a proactive tax strategist —someone who: Reviews your financials quarterly Suggests entity changes when appropriate (e.g., switching to S-Corp) Helps you plan retirement contributions strategically Guides you on recordkeeping that protects you in audits This is where Moment Private Wealth steps in. Ready to talk tax planning?   Schedule a conversation  with Moment today.

“Wait, you mean to tell me I owe more in taxes?” This was me circa 2009 when it came time to file my tax return. You see, I had just signed my first MLB contract, paid what I thought was a king’s ransom in taxes, and here I was still owing more. Fast forward a few decades, and I have the opportunity to lead Moment Private Wealth . A financial planning firm that specializes in athlete wealth management . They say history repeats itself, and that certainly feels true as we advise our athletes. They sign for life-changing money. They pay a king’s ransom in taxes. They owe more come the tax filing deadline. So in today’s blog, I am going to break down everything you need to know about your MLB signing bonus. You will understand what gets taken out, what taxes you will pay, and the strategies to consider. Let's dive in... The MLB Draft Experience The MLB draft is a life-changing experience for athletes (and their families). Yet, with all that excitement, also comes a world of unknowns. Heck, unless you had family members go through this experience, chances are everything is new. Stack on the fact that everyone has an opinion, comment, or “the way to do it.” The endless sea of information can lead you to be more confused than when you started. Good news, if you want a deep dive into the MLB draft, check out The Moment Guide to the MLB Draft. If you want to understand everything you need to know about an MLB signing bonus, keep reading. We are going to break down this topic into three sections. 1) MLB Signing Bonus Structure The MLB draft is built around a slot system. It works like this: teams are assigned certain picks (slots) in the draft based on how their MLB team performed the previous season. The worst teams get the first picks. The best teams get the last picks. Major League Baseball then assigns a slot value to each of those selections. Add up all of a team’s selections, and that is how you get an MLB team’s collective bonus pool. This is the amount of money a team can spend on its entire draft. Go over that amount and risk paying an overage tax or worse, losing a draft pick in a following year. Teams then draft players based on a combination of talent and their ability to sign for them their assigned slot value. The key aspect to understand outside of the dollar amount is how the bonus is structured. The typical signing bonus is paid 50% in year one and 50% in year two. The first payment, on average, is 30 days after approval of the contract. The second payment, on average, is in the first quarter of the following year. The higher you are picked, the more leverage you have to negotiate the percentages paid in each year. Depending on how you approach your overall tax planning strategy, this greatly affects what hits your bank account. For a full guide on athlete tax planning, check out our Moment Guide on Athlete Tax Planning . The other key structure to understand is the abandonment clause. This is a clause teams try to place in MLB draft contracts that allows them to pull back signing bonus money should a player quit the sport in the first few years. For most players, it pays to remove this clause if the team is willing. The reason is two-fold: 1.      It ensures the players will receive all the money. 2.     It ensures the signing bonus is taxed as a true signing bonus (more on that later) In short, I want you, the player, to have control over not just your bonus but also your tax planning. Removing the abandonment clause ensures both of those things. In short, every MLB draftee that signs a draft contract will sign a standard MiLB contract. This language is set. Yet as discussed above, there are tweaks to this structure that are critical to understand when it comes to a signing bonus. A properly structured signing bonus ensures you pay the least amount in taxes and control of your signing bonus payouts.   2) MLB Signing Bonus Taxation   There is so much confusion around taxes and MLB signing bonuses, and this section will teach you exactly what you need to know. Signing bonuses are earned income, so in short, they are taxed in a similar manner to any salary you earn on the field. Yet how you get paid them, the moves you make around payments, and the planning needed are quite different. For clarity, let’s walk through a hypothetical signing bonus of $2,000,000. Let’s say it is structured as 50% in year one and 50% in year two. Most MLB teams will withhold 22% for taxes from that initial $1,000,000 payment. That means $220,000 goes to taxes and $780,000 goes into your bank account. Now here is where the confusion starts. You will owe more than 22% in taxes on your signing bonus. 22% is a standard tax withholding on the first million of a signing bonus. The top federal income tax rate is 37% and your $1,000,000 payment puts you squarely in that bracket. That means your total tax liability is closer to $370,000 (actually a touch less). But remember, the team only withheld $220,000. So you need to set aside another ~$150,000 for taxes come next April 15 (tax filing deadline). Now the good news is you can (and should be) earning interest on that $150,000 before you have to pay it to the IRS. The bad news is if you don’t have a team that specializes in athlete wealth management you might have a huge surprise come tax season. At Moment, our first move after a signing bonus comes in is running a tax projection and setting aside the necessary money needed to fulfill the full tax obligation. Now, a short aside on state taxes. This blog is not going to dive into the nuances of state taxiation on signing bonus. Yet you need to understand the role state taxation plays in the taxation of your signing bonus. In our hypothetical $2,000,000 example a player in CA would be subject to roughly $208,000 in state taxes while a player with Florida residency would pay no state income taxes. This is another massive tax planning opportunity for MLB draftees and something that we help our MLB draftees with at Moment. Now, onto the strategies you need to consider with an MLB signing bonus.   3) MLB Signing Bonus Strategies   There are so many things you “could do” with your MLB signing bonus to maximize it. So I am going to list the four most critical ones to consider, from easiest to hardest. Maximize your MiLB 401(k)   Major League Baseball made a massive change in 2024. They created a league-wide MiLB 401(k) plan that newly drafted players are eligible to contribute to.   This is the easiest way for any MLB draftee to reduce their current year tax bill.   Consider our previous example of a player with a $2,000,000 signing bonus. In 2025, that means a contribution $23,500 into the MiLB 401(k). That equates to a current-year tax savings of more than $8,500.   The key factor here is time; in order to maximize this contribution in the year a player signs, it needs to come out of your signing bonus. That means enrolling, setting up, and electing the correct contribution in the first 15 days after a player signs.   The reason for this is that most teams require a two-week notice to make any payroll changes. Those changes include 401(k) contributions.   Run a Tax Projection   You don’t want to be like me and have a surprise tax bill come next April. You want to work with a team that specializes in athlete tax planning.   At Moment, we work directly with the team payroll department to source the paystub and run a tax projection, ensuring every player knows what was withheld for taxes and what will be owed come next April.   Set Aside the Taxes Owed (but not yet paid)   Now, just understanding what you owe is step one. Understanding how to maximize that money is step two.   For our MLB draft clients, we use low-risk positions that allow players to earn interest on that money until we have to pay it. In previous years, this has meant thousands of dollars of additional money earned.   State Residency Strategy Look, state residency is your biggest move as a current or future MLB draftee. It is the single biggest step to take to save the most money on taxes. Yet to do it correctly, it is a complex step with lots of moving parts. You need to structure the signing bonus correctly, navigate the steps of establishing new residency, and ensure your financial team is working in unison with the MLB team’s payroll department. At Moment, we have walked through this process ourselves and helped MLB draftees navigate these complexities each year. Yet, it is different for each family, so here is my advice ~ Get educated on the options, the pitfalls, the pros, and the cons so you can make an educated decision. After all, we have one chance to do this right.   I have an incredible passion for helping the next generation of MLB draftees maximize every aspect of their financial life. That drive stems from personal experience walking in your shoes. Personal experience, knowing how hard it is to make money playing a sport. Personal experience knowing how much subpar information is out there for families. My mission as always is to help you get smarter with your money and I hope this blog helps you and your family navigate the complexities of an MLB Signing Bonus.   Moment was built to serve the specific needs of professional athletes.   To learn more about how we help book a call today and speak to our team today. Looking for more ways to get smarter prior to the MLB draft - Check out my YouTube page. Get in Touch With An Advisor Frequently Asked Questions Here are some answers to questions received regarding athletes and money: When does Moment start working with future MLB draftees? We start working with families often a year before the MLB draft. Our goal is to ensure every family is educated on their options and can enjoy the draft when it comes. Does Moment help players with state residency? Yes, Moment has a checklist we walk every player through to ensure they are compliant in navigating state residency. How does Moment work with my agent? Moment works with every major sports agency, and that collaboration ensures all of our athletes maximize not just their signing bonus but their career earnings. Does Moment provide tax planning and strategy for MLB draftees? Yes, we handle all of our athletes' tax planning and team coordination. As part of your team at Moment, you will be working with a sport-specific CPA firm specializing in navigating everything that comes with athlete taxation. *Moment Private Wealth offers information on tax and estate planning that is general in nature. Tax and Legal advice are not provided by Moment Private Wealth. Consult an attorney or tax professional regarding your specific legal or tax situation.

Draft day is electric. Years of work finally pay off - and for the first time, life-changing money is on the table. But here’s the reality no one tells you: That headline signing bonus? It’s not what actually lands in your account. And the decisions you make in the first 90 days determine whether that moment becomes a launchpad for long-term wealth… or a story of missed opportunity. At Moment Private Wealth, this is where we come in. We help athletes take control of the money game - so they can focus on the actual game. The Illusion of the Bonus The average signing bonus of the first 43 picks in the 2025 MLB Draft  was $4,338,931 . Here’s what that really looks like after taxes and fees: Federal Income Tax (~37%):  ~$1.60M Agent Fees (5%):  ~$220K State Income Tax (North Carolina @ 4.25%):  ~$180K ➡ Total Costs:  ~ $2.0 million➡ Net in Your Account:  ~ $2.34 million That means roughly half your bonus is gone  before you make a single financial decision. This is why the first 90 days matter so much. The earlier you put structure in place, the more control you’ll have over what you keep. The Payment Schedule: Two Checks, Two Tax Years One often-overlooked detail: your signing bonus usually isn’t paid in one lump sum.  For most players, it comes in two installments over two calendar years : First 50%  — typically 30-45 days after your contract is approved. Remaining 50%  — paid the following year, usually between January and April, depending on the team’s payroll schedule. For example, on the average $4.34M bonus: ~$2.17M arrives within weeks of signing. ~$2.17M comes in early the next calendar year. This structure has major implications for tax planning, cash flow management, and investment timing. Knowing when your money hits is just as important as knowing how much. The higher the draft pick the more leverage you have to negotiate how your signing bonus is paid out. That leverage can open the door to further tax planning opportunities based on the percentage paid out in a given year. State Residency for Athletes Residency is one of the most misunderstood aspects of professional sports. Where you live on draft day has an outsized impact on your finances. MLB spring training happens in Florida (0% tax) or Arizona (2.5%). Establishing residency in one of these states can create six-figure savings. Example: California (13.3%) vs. Florida (0%) on a $4.34M bonus = $576,000+ swing. But this isn’t just swapping your driver’s license. A proper residency plan includes housing, documentation, lifestyle alignment, and ongoing proof to withstand scrutiny from state tax authorities. We guide clients through this step-by-step and coordinate with CPAs, agents, and payroll departments to ensure it’s done right. Retirement Accounts: The Hidden Advantage Most players think retirement accounts are for the future. In reality, they’re a tool to save money now  and build wealth for later. MiLB/Solo 401(k):  Contribute up to $70,000  and deduct it from taxable income. Backdoor Roth IRA:  Add another $7,000  with tax-free growth. Together, these moves can reduce your tax bill by ~$27,500  in year one. More importantly, it jumpstarts compounding - turning today’s dollars into tomorrow’s wealth. Investing Like a Pro Athlete (Because You Are One) Getting money in the door is only half the battle. The real question is: How much do you keep after taxes and bad investment choices? Athletes earn early, peak fast, and face unique risks. That’s why we design portfolios with an emphasis on flexibility and tax efficiency: Municipal Bonds:  Generate tax-free income. ETFs & Individual Stocks:  Provide more control and efficiency than traditional mutual funds. Donor Advised Funds:  Lock in charitable deductions while supporting causes you care about over time. Our goal is simple: growth that matches your career arc and maximizes after-tax returns. Why the First 90 Days Define the Next 30 Years Draft day is a milestone - but it’s only the beginning. The financial moves you make in the weeks after being drafted will echo for decades. This is why Moment Private Wealth exists. We’re not product salespeople. We’re fiduciaries - CFPs and investment professionals dedicated to building financial game plans for top MLB Draft Picks and the games biggest stars at their most pivotal moments. Key Takeaways for Draft Picks Half of your bonus disappears fast  — taxes and fees take a huge bite before you ever touch the money. Plan for the net, not the headline number. Your bonus comes in two checks  — one soon after signing, the other the following year. Plan for both tax years. Residency is a game-changer  — choosing the right state could mean six-figure savings in year one alone. Retirement accounts are tax weapons  — use them early to lower today’s bill and build long-term wealth. After-tax investing matters most  — the goal isn’t just growth, it’s keeping  as much of that growth as possible. The first 90 days set the tone  — the right structure now creates clarity, security, and momentum for decades. If you’re ready to see how much of your bonus you can truly keep and how to turn it into long-term wealth, let’s run the numbers and build your playbook today.   If you are an athlete or the family of an athlete exploring the MLB draft, connect with our team.   Moment was built to serve the specific needs of professional athletes.   You can book a call today and speak to a founder. Have more questions? Check out our YouTube page for ways to get smarter with your money. Get in Touch With An Advisor Frequently Asked Questions Here are some answers to questions received regarding athletes and money:   How does Moment help draft picks prepare for the MLB draft? Our focus is on educating families around signing bonus structures, amounts, tax planning, and everything that goes into actually signing your MLB draft contract. What is the biggest tax mistake you see with professional athletes? The biggest mistake we see is not planning in advance. There is a big difference between tax planning and tax preparation. How does Moment work with CPA firms? We work hand in hand with CPA firms that specialize in professional athletes. This way our clients are getting specific advice regarding their tax planning moves. What is unique about tax planning for professional athletes? The short earning arc, multi-state taxation, and income fluctuations provide athletes with circumstances often unique to them. We must account for all of these factors when looking at tax planning for professional athletes. *Moment Private Wealth offers information on tax and estate planning that is general in nature. Tax and Legal advice are not provided by Moment Private Wealth. Consult an attorney or tax professional regarding your specific legal or tax situation.

You've signed the deal. You're finally getting paid for what you bring to the game. You might have $500,000 coming in. Maybe $750,000. Maybe even a $1,000,000 NIL deal with incentives. But here's the part that gets lost in all those zeros: It's not what you make. It's what you keep. And more importantly - what you build with it. NIL Isn't a Scholarship. It's a Business. Believe it or not, you are a CEO now. Whether you're a quarterback, point guard, starting pitcher, NIL has turned you into a business owner overnight. That means new rules - financial, legal, tax, and investment rules - that weren't part of the playbook in the locker room. In this article, I am going to break down a clear roadmap built for athletes like you who are serious about building wealth. Where Most NIL Athletes Go Wrong Let's start here: You grew up in the state of California and are the starting quarterback for your high school. You sign a $1,000,000 NIL deal heading to a top 10 program. After agent fees (say 3% - 5%), taxes, expenses, and not knowing how to handle it... You might walk away with less than $515,000. - if you're lucky. Here's how (keep in mind, this is a complex example and other factors are involved): Item Amount Agent Fee (5%) $50,000 S Corp Salary $200,000 Distributions $750,000 Payroll Taxes on Salary (15.3%) ~$30,600 Federal Income Tax (blended) ~$285,000 CA State Tax (blended) ~$90,000 Legal/Business Setup $10,000–$20,000 Total Taxes & Fees ~$465,600 Take-Home (After Tax & Fees) ~$514,400 You can see where this is going. NIL athletes are cashing massive checks - but without a plan, that $1,000,000 can become $0 really quickly. The 5 Pillars of NIL Wealth There's a smarter way. One that protects your money, your brand, and your future. Here are the 5 Pillars we recommend building for every high-earning NIL athlete at Moment Private Wealth : Cash Flow Planning: Tell Your Money Where to Go You have earned that $1,000,000 NIL paycheck. But to keep it, you have to do some planning. Without a cash flow plan, your money will disappear - to taxes, spending, or just lifestyle creep. Here's how to stay in control: Use the 50/30/20 Rule (or better): 50% Needs (housing, food, taxes) 30% Investing/Saving 20% Wants (travel, fun, clothes) Create automatic transfers to your savings and investment accounts each month - PAY YOURSELF FIRST! Track your spending weekly or monthly - if you don't know where your cash is going, you are setting yourself up for failure. The key is to build your lifestyle around budget - not your NIL deal. Tax Planning: The Silent Killer Uncle Sam wants his share in your success - and trust me, he is not patient. Most NIL athletes don't know: NIL income is considered self-employment income That means you're responsible for federal, state, AND self-employment taxes The IRS doesn't care that you're 20 years old with a marketing major Here is what you should do: Pay quarterly estimated taxes Maximize deductions - business expenses, travel, legal, meals (within IRS rules) Hire a CPA who understands athlete tax law Use retirement accounts (Roth IRA, Solo 401(k)) to reduce taxable income Let me give you an example: You contribute $70,000 to a Solo 401(k) in 2025 (employee + employer match). That money grows tax deferred - and you save $70,000 off your taxable income. So on that $1,000,000 NIL contract, you are now only paying taxes on $930,000. That makes a difference. Entity Formation: Get Your LLC Right If you are earning six or seven figures through NIL, you shouldn't be taking checks in your personal name. You need an LLC. Here's why: Liability Protection - separates your business from your personal life Brand Control - gives you a structure to license your name/image Tax Benefits - allows for business deductions and S-Corp treatment Here's another example: You run all NIL income through Brendan Enterprises, LLC. You elect S-Corp status and pay yourself a reasonable salary of $200,000. The rest is taken as distributions - not subject to self-employment tax - saving you $30,000 to $50,000+ per year. So taking the $930,000 (after the Solo 401(k) contribution) and now electing an S-Corp, you are now paying taxes on $900,000. You see, this is where a financial team that specializes in helping athletes is a difference maker. At Moment Private Wealth we are specialists in athlete wealth management  ensuring you maximize your benefits. Investment Strategy: NIL Doesn't Last Forever Let's be real for a second. NIL income is temporary. Let me say that one more time - NIL income is TEMPORARY . But if you play it right, the wealth can be permanent. Your game plan should include: Automatic investing into diversified portfolios. Setting up a Roth IRA or Solo 401(k) for long-term, tax-free growth Using a portion of NIL to build passive income - so your money works when you're not Check out this projection: If you put this money to work for you, earn ~6% in the market (which is very conservative by-the-way), by the time you are 70, your $1,000,000 NIL contract would be worth almost $12,000,000 without adding any other investments . Protection: You Are the Asset You are your business. If you can't play, promote, or post...you probably don't get paid. Here's what that means: You need to look at disability insurance in case injury cuts your earning power You need umbrella liability insurance to protect against lawsuits You need smart contracts and legal review for all deals You need estate planning (yes, even while you are young) to protect your family and your assets Why it matters: If you get injured during your junior season and lose a $1,000,000 NIL endorsement - disability insurance could replace a portion of that lost income. Real NIL Strategy in Action Let's walk through a real scenario: Athlete: Starting QB at a top-10 program NIL Income: $1,000,000 Goals: Play in the NFL, save for post-college life, invest, minimize taxes, protect brand Step-by-Step Plan: Hire a wealth management team that specializes in helping athletes - this may not seem important, but I am telling you right now...it is! Work with your wealth management team to form an LLC and elect S-Corp status. The right financial team will provide an attorney that specializes in helping athletes Pay yourself a W-2 salary and take the remaining as a distribution - this is a conversation to discuss with your wealth management team and CPA Set aside funds to pay your taxes immediately - no one likes doing this, but you need to stay out in front of this Max out your Solo 401(k) - in 2025, that is $70,000 Build 3 investment accounts: Short-Term Savings (cash, high-yield savings) Individual Brokerage Account Long-Term Growth (Roth IRA) Have risk management measures in place Umbrella Policy - work with your wealth management team to get you the proper coverage Disability Income Insurance Review Endorsement Contracts It may not seem important now, but by the end of the year, you will walk away with: Tax-compliant business income Money invested for the future Legal protection Peace of mind Final Word: NIL is a Window, Not a Lifetime Your average NIL career might last 3-4 years But, your wealth can last three decades - if you plan it right. At Moment Private Wealth, we specialize in turning short-term NIL income into long-term financial freedom. Your future starts now. ___________________________________________________________________________________________________________ If you are an NIL athlete and want to better understand how to manage your wealth, schedule a call with a Moment Founder . Not sure what questions to ask, check out this video on 10 questions you should ask when interviewing a financial advisor. Get in Touch With An Advisor Frequently Asked Questions Here are some answers to questions I received frequently about this topic. Do I really need an LLC if I'm under 21?  Yes. Your age doesn't matter - your income does. An LLC gives you protection and structure. H ow much should I set aside for taxes?    Plan for 35-40% of your NIL income to cover federal, state, and self-employment taxes. Can I invest my NIL income?   Absolutely! NIL income is earned income - you can use it to open a Roth IRA, Solo 401(k), or a brokerage account. What is the first step I should take?   Set up a call with a financial advisor at Moment Private Wealth who understands NIL, taxes, and business structuring. Don't wait until tax season. ___________________________________________________________________________________________________________ *Moment Private Wealth offers information on tax and estate planning that is general in nature. Tax and Legal advice are not provided by Moment Private Wealth. Consult an attorney or tax professional regarding your specific legal or tax situation.

Why Business Succession Planning Matters More Than You Think Being a business owner is not for the faint of heart. You’ve taken risks, survived the valleys, and built something that not only provides for your family today — but could support generations if you plan wisely. Yet Business Succession Planning  is often the last thing owners tackle. You’re busy solving today’s problems — who has time to think 10 years ahead? But here’s the thing: Without a plan, you’re gambling with everything you’ve built. A smart succession plan isn’t just about selling — it’s about: Protecting your family  from chaos and tax surprises. Keeping employees and partners whole  when you step away. Maximizing the value  of your life’s work. Locking in your legacy , on your terms. At Moment Private Wealth , we see it all the time: business owners who wait too long, then scramble when life happens. Our mission? Make sure that’s not  you. When Should You Start Your Succession Plan? The best day to start planning was yesterday. The second-best day is today. Good succession plans take time to design, refine, and execute. We tell owners to start at least 5–10 years  before your target exit. That gives you time to: Train a successor  (if it’s internal or family). Position your business for maximum value. Create business strategies  that don’t crush cash flow. Minimize taxes , which can gut your payout if you’re not careful. Life happens. Health changes. Markets shift. The sooner you plan, the fewer regrets you’ll have. Who Needs to Be at the Table? You can’t build a solid plan alone. These are the key players every owner should have around the table: Your family.  Do they want to be involved? Will they inherit the business — or just the proceeds? Key partners and employees.  If you’re selling internally, they need to know the roadmap. A fiduciary financial advisor.  Like Moment Private Wealth — a team that works only for you, not for hidden commissions. A CPA.  Taxes can take 30%–50% of your proceeds if you don’t plan carefully. An attorney.  For buy-sell agreements, operating docs, and trusts. Good succession planning is a team sport.   At Moment, we coordinate that entire team for you, so nothing slips through the cracks. Building a Succession Plan That Actually Works A succession plan shouldn’t live in a desk drawer. It should be real, written, reviewed regularly, and built to hold up when life doesn’t go as planned. Let’s break it down step by step. Step 1: Clarify Your Endgame Too many owners think they’ll “just know” when it’s time. But the way you exit shapes everything else, so be clear. Ask yourself: Do I want to sell to an outsider for maximum value? Is the dream to pass it to family? Could a key employee or group buy me out over time? What’s non-negotiable? Keeping the brand? Taking care of my team? When we work with clients at Moment, we start here. If you don’t know your final destination, no map will get you there. Step 2: Identify Potential Successors If you’re passing it to family or internal leaders, be honest: Are they ready? Do they want it? Family succession can be beautiful — or it can tear families apart if you force it. We help owners get real about: Who has the skillset? Who has the desire? How can you mentor them over time? Sometimes the answer is “none of the above.” That’s when an outside sale or employee buyout might make more sense. Step 3: Value the Business Properly Don’t guess. Your “napkin number” might feel right, but buyers (and the IRS) see it differently. A professional valuation considers: Earnings and cash flow Market trends Your industry’s multiples Future growth potential Existing debts or risks At Moment Private Wealth, we partner with top valuation pros so owners get a realistic figure, not just wishful thinking. Step 4: Create a Funding Strategy A great plan without funding is just a wish. Buyouts don’t magically pay for themselves. Most next-generation owners don’t have millions in the bank. Here are a few common funding tools: Installment sales.  The buyer pays you over time, giving you income and tax flexibility. Life insurance.  A policy can fund a buyout if an owner passes unexpectedly. ESOPs.  Employee Stock Ownership Plans can let employees buy you out gradually. Private equity or outside investors.  Sometimes the best buyer isn’t inside the company. The right strategy depends on your goals, tax situation, and timeline. This is where real advice pays for itself. Step 5: Put It in Writing If you only remember one thing: Write. It. Down. A handshake deal won’t cut it when life happens. A real succession plan should include: A buy-sell agreement.  Clear terms on how ownership transfers. Updated operating agreements.  So partners know what happens if someone leaves or passes away. Trusts and estate planning documents.  To handle taxes and keep the IRS out of your family’s wallet. A funding plan.  So there’s cash to make the deal work. This paperwork is your business’s final insurance policy. At Moment, we make sure it’s airtight — and stays updated as life evolves. How Taxes Can Wreck a Great Exit Taxes are the silent killer of wealth transfers. Without smart planning, capital gains, estate taxes, and income taxes can swallow 30–50%  of your business sale. Some strategies we help owners consider: Selling stock vs. selling assets (big tax difference) Timing sales over multiple years Using trusts to shift assets ahead of time Taking advantage of lifetime gifting exclusions Using charitable strategies for big gains You built this company. Don’t leave the IRS a tip on the way out. Common Pitfalls That Sink Succession Plans We see the same mistakes over and over: ❌  Waiting too long.  Health issues or sudden market downturns can force a bad deal. ❌  Overestimating the sale value.  If your number’s off by millions, the plan doesn’t work. ❌  Failing to prepare the next leader.  The business can collapse if they’re not ready. ❌  Ignoring taxes.  A 7-figure surprise bill is the last thing your family wants. ❌  Not revisiting the plan.  Life changes — so should your documents. Real-Life Example: When a Plan Saves the Day One of our clients at Moment was a third-generation owner of a manufacturing company. He assumed his kids would take over — until we sat down and asked them. Turned out, neither wanted the day-to-day headaches. Good thing he asked early. We helped him pivot to an internal buyout with his COO — with a life insurance policy to back the deal if something happened unexpectedly. The business stayed healthy. The family got paid. The team kept their jobs. That’s a win. Bonus: Top 10 Questions to Ask When Planning Your Exit 1️⃣ Who do I really  want to take over — and are they ready? 2️⃣ What’s my company really  worth? 3️⃣ How do I want to be paid? Lump sum, installments, or mix? 4️⃣ What taxes will I owe? 5️⃣ Who pays for the buyout? 6️⃣ How do I protect my employees? 7️⃣ Is my spouse or family aligned with my plan? 8️⃣ What happens if I pass unexpectedly? 9️⃣ What professionals do I need to get this right? 🔟 What happens if my plan doesn’t  go as planned? FAQs on Business Succession Planning Q1: What’s a buy-sell agreement and why do I need one? It spells out exactly how shares are transferred if an owner dies, retires, or exits. Without it, disputes are almost guaranteed. Q2: What if my successor can’t afford to buy me out? That’s where insurance, installment sales, and creative financing come in. Planning makes it possible. Q3: Should I sell to family at a discount? Sometimes — but talk to your advisor first. Big gifts can create big tax issues. Q4: Can I still get income if I exit? Absolutely. Installment sales, consulting agreements, or partial buyouts can provide steady income. Q5: What’s the biggest mistake owners make? Waiting too long and assuming everyone’s on the same page. Spoiler: They rarely are. Final Thoughts: Lock in Your Legacy Business Succession Planning  isn’t just another box to check — it’s the final chapter of your life’s work. At Moment Private Wealth, we know owners only get one shot to exit wisely. That’s why we roll up our sleeves, get our hands dirty, and build plans that actually work  — so you can step away with confidence. Ready to talk exit planning?   Schedule a conversation  with a Moment founder today.

"This is the big leagues"! My exact thought as I was walking aimlessly through the Detroit Tigers' clubhouse in 2011. I was a 20-year-old trying to figure out how this "big league" thing worked. It felt like every need I had was being met proactively by a world-class staff and clubhouse attendants. I never thought a clubby would help me save thousands of dollars on my taxes. Yet, that is exactly what happened when a clubhouse attendant, in passing, asked if I was contributing to the MLB 401(k) plan. It sounded Greek to me, "401..what"? You see in 2011, minor league players had no access to a team-sponsored 401(k) as they do now. So when I got called up to the big leagues, I didn't know what it was, how it worked, or the benefits of doing it. Funny to think about now, but the conversation has saved me thousands (probably more) off my lifetime tax bill. In this blog, I am going to break down everything you need to know about the Major League Baseball 401(k) plan. As you read this, remember retirement planning for professional athletes starts while you are still playing. MLB 401(k) Plan A 401(k) plan is a company-sponsored retirement plan. Said another way, it is a benefit an employer offers you to further incentivize you to stay with them. A 401(k) is one of the most standard benefits companies provide. The reason is simple: it is an efficient way to save for retirement. You see, the IRS provides benefits for 401(k) contributions. Contributions work in one of two ways: Roth Contributions Traditional Contributions The difference between the two is how those contributions are taxed. Roth contributions receive no current-year tax benefits, but your money grows tax-free and comes out tax-free after age 59.5. Traditional contributions receive a current-year tax benefit (deduction), but your money grows tax-deferred and is taxed upon taking it out. In short, one type provides a benefit today while the other provides a benefit in the future. The key is understanding what your tax bracket is today and what you are projecting it to be in the future. Another note on 401(k) plans is that those tax benefits don't come without a catch. You see, contributions are subject to a 10% penalty should you withdraw them before the age of 59.5. ***Roth contributions can be taken out, but all investment growth is subject to penalties. Now that we understand the basics of 401(k) plans, let's dive into how the Major League Baseball 401(k) plan works. MLB 401(k) Eligibility & Enrollment Remember how 401(k) plans are company-sponsored plans? Well, that means there are often restrictions as to when you are eligible for the plan. For the Major League Baseball plan, a player must be on the active 26-man roster or the MLB injured list. Once you become an active player, you are automatically registered on the plan. That does not mean you're optimizing your situation; it simply means you are enrolled. In spring training, teams will provide you with a form to elect your plan status and contributions (more on that later). Our team at Moment helps players each year to ensure all eligibility and enrollment forms are completed correctly. Here are the key details of the MLB 401(k) plan: The plan is held at Vanguard Your eligibility is based on your roster status MLB provides players with enrollment forms in spring training So remember this while you are automatically eligible and enrolled upon being added to the active roster, that is just step one. The understand how to maximize the MLB 401(k) plan, we have to understand who, what, and how money is contributed to the plan. MLB 401(k) Contribution Limits The MLB 401(k) plan has three different ways you can make or receive contributions. Pre-Tax Contributions (Players make these) Post Tax Contributions (Players make these) Major League Baseball Contributions (Team makes these) A pre-tax contribution means that you are putting in money before paying taxes on this money. Remember how traditional 401(k) contributions receive a tax benefit? This is how. A post-tax contribution means that you are putting in money that you have already paid taxes on. MLB contribution is a direct team contribution to your 401(k). More on this later but this amount varies from year to year. In 2025, the contribution limits are as follows: $23,500 pre-tax $70,000 employee + employer (post-tax + MLB) The key to understanding the MLB 401(k) plan is understanding how MLB contributions work. This is not a match (common for a 401(k)); this is a direct team contribution. That means a player is not required to make a contribution to receive this benefit. Instead, they receive this benefit based on that year's service time. For a player to be eligible for a team contribution, they must achieve a quarter of the year of MLB service time in that season. That equates to 43 days on the active roster. You see, teams are assessed a luxury tax based on going over certain levels of spending. In 2023, that spending level was $237,000,000. 1st time offenders pay a 20% tax 2nd time offenders pay a 30% tax 3rd time (or more) offenders pay a 50% tax A portion of that tax is allocated to player benefits, including MLB 401(k) contributions. So the more teams spend (and go over the threshold), the more money players receive in team 401(k) contributions. Here is an example of the 2025 MLB 401(k) contributions for players: $17,500 Quarterly Team Contribution $70,000 Yearly Team Contribution Players, to receive the maximum benefit from the MLB 401(k) plan, you need to make sure your financial team understands all the details of the plan. MLB 401(k) Considerations Now that we understand what a 401(k) is and how the MLB 401(k) contributions work, let's discuss the fine print. You know the stuff that matters that no one ever talks about. Investment Selection When you start contributing to the MLB 401(k) plan, that is just a contribution, not an investment. That money will be automatically put into a conservative life strategy fund administered by Vanguard. You need to work with a qualified financial team to make sure your contributions are properly invested based on your goals. I have seen players leave hundreds of thousands on the table by not adjusting their investment selections. Plan Rollovers At some point, your playing career will end and you will have a choice to make. You can roll over (move) your 401(K) to an IRA or keep it at Vanguard. An IRA stands for Individual Retirement Account and essentially functions the same way as a 401(k) without the company component. There are no tax consequences involved with rolling this money from the MLB 401(k) to your IRA. Yet there are several key tax planning considerations to understand. If you want a deeper dive into tax planning for professional athletes , you can check out that blog. For this one, just understand you need to make sure there is a tax strategy in place should you wish to make this move. The transition time from current player to former player can be an optimal time to think long-term about tax planning. Everyone focuses on the massive salaries you can earn as an MLB player, and rightfully so. Yet, it is critical not to overlook the benefits the MLB 401(k) plan provides current players. Done correctly,y this can be a key building block to your retirement planning as a professional athlete . I have seen players spend years in the big leagues and fail to understand the key details of the MLB 401(k) plan. That, my friends, is the quickest way to take a key benefit and waste it. If you are a current or former Major League Baseball player looking for help understanding the MLB 401(k) plan, schedule a call with our team . If you are looking for more on retirement planning as a professional athlet,e check out this video on how we think about this. Get in Touch With An Advisor Frequently Asked Questions Here are some answers to questions I received frequently about this topic. Where is the MLB 401(k) plan held ? The plan is held at Vanguard and can be accessed using their website. What is the maximum contribution a player can make in 2025? The maximum contribution allowed in 2025 is $70,000. This includes both team and player contributions. Do players have to do anything to receive team contributions? All players who achieve at least 43 days of MLB service time in 2024 will receive team contributions. A player maxes out team contributions with a full year or four quarters (43 days) of MLB service time. Are players' 401(k) contributions automatically invested? Yes, contributions are automatically invested into a Vanguard conservative investment fund. Players can then elect to change future or current contributions based on their goals. Can players move their MLB 401(k) plan after retiring? Yes, a player can roll over their MLB 401(k) to an Individual Retirement Account if they choose. While there are no tax consequences for this there are several tax considerations players should understand before doing this. *Moment Private Wealth offers information on tax and estate planning that is general in nature. Tax and Legal advice are not provided by Moment Private Wealth. Consult an attorney or tax professional regarding your specific legal or tax situation.

You started your business with a vision. You took the risk. You put in the work. You’re seeing the rewards. But here’s the problem —making money is just step one, managing it is step two. You see, it’s not just about how much you make—it’s about how much you keep and how well you use it. That’s where budgeting comes in. It is the foundation of financial planning for business owners. In this guide, I’m going to break down the key steps to building a budget that will give you clarity, control, and the confidence to scale your business Let’s dive in… The Budget Problem Many business owners run their operations without a defined financial strategy. Everyone knows their top-line revenue (it is good coffee shop conversation). Yet nearly no one knows their expenses like they should. They reinvest in the business but fail to monitor their profitability. They anticipate having leftover funds at the month's end but do not actively plan for it. The result? Cash flow issues, unnecessary debt, and missed opportunities for growth. If this sounds familiar, don’t worry—you’re not alone. But the good news is that fixing it is simpler than you think. The Three Buckets of a Business Budget Think of your business finances in three buckets: Fixed Costs  – These are your non-negotiable expenses like rent, payroll, and insurance. They don’t change much month to month. Variable Costs  – These are expenses that fluctuate, like marketing, advertising, and materials. The key is to control these so they align with your revenue. Profit & Distributions – This is what’s left over. The mistake many business owners make is treating profit as an afterthought. Instead, you need to build it into your budget from the start. You have to know more than just your baseline expenses. You need to know what expenses are set in stone (fixed) and what expenses could be cut at any time (variable). Understanding that provides the framework to know what needs to stay in your business and what can come out as distributions. Step-by-Step: How to Build a Budget That Works Know Your Numbers Start with your revenue: What are you bringing in each month? Track every expense: Where is your money actually going? Identify trends: Are expenses growing faster than revenue? Set a Profit First Mentality Instead of waiting to see what’s left at the end of the month, set a fixed percentage of revenue for profit and pay yourself first. Plan for Taxes Taxes are often a business owner’s biggest surprise expense. Allocate a percentage of revenue each month so you’re never caught off guard. Create Spending Limits Set clear limits for categories like marketing, office supplies, and software. This keeps spending intentional and aligned with your goals. Review & Adjust Monthly A budget isn’t static—it’s a living document. Review it each month and adjust based on your business performance. Common Budgeting Mistakes Mistake #1: Not Separating Business & Personal Finances Keep your business and personal accounts separate. Mixing them creates chaos and makes budgeting nearly impossible. Mistake #2: Overestimating Revenue, Underestimating Expenses Be conservative with revenue projections and realistic with expenses. Hope is not a financial strategy. Mistake #3: Ignoring Emergency Funds Every business needs a buffer. Aim for 3-6 months of expenses in an emergency fund to protect against slow periods or unexpected costs. A strong budget doesn’t limit you— it empowers you : To Reinvest To Scale Further To Take Out Distributions To Feel Confident In Your Next Move Let me be clear ~ You cannot grow a great business without first knowing your numbers. Whether your business is just starting out or already thriving, taking the time to create and maintain a solid budget will be one of the best decisions you make. If you are a business owner doing more than $1,000,000 in income and looking for a team that specializes in you schedule a call  with   our team. Get in Touch With An Advisor Frequently Asked Questions Here are some answers to questions received regarding budgeting for business owners: 1. How much should I pay myself as a business owner? There’s no one-size-fits-all answer, but a good rule of thumb is to start with at least 30% of your profit and adjust based on business performance. 2. What percentage of revenue should I allocate for taxes? Set aside 25-30% of revenue for taxes to ensure you’re covered, especially if you don’t have automatic withholdings. 3. How often should I review my budget? At a minimum, review your budget monthly. A quarterly deep dive can help adjust for major shifts in revenue or expenses. 4. What if my revenue is inconsistent? If your income fluctuates, create a baseline budget based on your lowest revenue month to ensure essential expenses are always covered. 5. What’s the best tool for budgeting my business finances? There are great options like QuickBooks, Xero, or even a simple Google Sheet. The key is to choose one and use it consistently. *Moment Private Wealth offers information on tax and estate planning that is general in nature. Tax and Legal advice are not provided by Moment Private Wealth. Consult an attorney or tax professional regarding your specific legal or tax situation.

Running a business is demanding, and managing taxes can feel overwhelming. But with smart tax strategies, you can lower your tax bill, keep more money in your business, and grow wealth efficiently. Below are key tax strategies every business owner should use to maximize savings and avoid costly mistakes. Are you looking for a comprehensive blog on wealth management? Check out this Blog. Why Tax Planning Matters for Business Owners For business owners, taxes are often the biggest expense. Without a solid tax strategy, you could be paying tens of thousands of dollars more than necessary each year. The good news? With the right planning, you can minimize your tax burden and maximize your business’s growth potential. Avoiding Common Tax Mistakes Many entrepreneurs make the mistake of thinking tax planning is something to consider only at the end of the year. In reality, effective tax planning is a year-round strategy. Business owners who neglect tax planning often find themselves facing unexpected tax bills, penalties for underpayment, and missed opportunities for deductions and credits. Why Tax Planning is Essential: Keeps More Money in Your Business : Every dollar saved in taxes is a dollar that can be reinvested in your business to fuel growth. Helps Avoid IRS Penalties : Failing to pay estimated taxes or misreporting income can lead to hefty fines. Provides Financial Stability : Knowing your tax obligations in advance helps you manage cash flow more effectively. Prepares You for the Future : Smart tax planning doesn’t just reduce your current tax bill; it also helps you build long-term wealth. By understanding and applying tax strategies, business owners can reduce their liabilities, optimize cash flow, and focus on growth. Let’s explore how. 1. Choose the Right Business Structure Your business structure has a huge impact on your tax liability. Choosing the right one can help you minimize self-employment taxes and qualify for special deductions. Common Business Structures: Sole Proprietorship : Easy to set up, but offers no tax separation between business and personal income. LLC (Limited Liability Company) : Provides legal protection and allows flexible tax options. S-Corporation : Let owners avoid self-employment taxes on distributions and qualify for the Qualified Business Income (QBI) Deduction. C-Corporation : Best for businesses planning to scale but subject to double taxation. How the Right Structure Saves You Money: S-Corps can help you save on self-employment taxes by allowing you to pay yourself a reasonable salary and take additional profits as distributions, which are not subject to payroll taxes. LLCs offer flexibility to be taxed as a sole proprietorship, partnership, S-Corp, or C-Corp, depending on what’s most tax-efficient. Example:  James restructured his business as an S-Corp, reducing his taxable income by $200,000 annually using the QBI Deduction, saving $70,000 per year in taxes. 🔗 Learn about tax-efficient business structures . 2. Maximize Deductions Tax deductions reduce your taxable income, helping you keep more of your profits. Key Deductions for Business Owners: Home Office Deduction : Deduct a portion of your rent, utilities, and internet. Section 179 Depreciation : Deduct the full cost of business equipment in the year of purchase. Travel & Marketing Expenses : Deduct business trips, advertising, and client entertainment. Health Reimbursement Arrangements (HRA) : Reimburse yourself for medical expenses tax-free. How to Maximize Deductions: Track Every Expense: Use accounting software to capture every deductible cost. Document Thoroughly: Keep receipts and detailed records to substantiate deductions in case of an audit. Bundle Expenses: If possible, make large purchases before the end of the fiscal year to increase deductions. Example:  James claimed $130,000 in deductions annually, saving $45,500 per year at a 35% tax rate. 🔗 Explore business deduction strategies . 3. Contribute to Retirement Accounts Retirement accounts are a powerful tool to reduce taxes and build wealth. Best Retirement Plans for Business Owners: Solo 401(k) : High contribution limits for self-employed individuals. SEP IRA : Contribute up to 25% of net earnings. Defined Benefit Plan : Ideal for high earners wanting to maximize tax-deferred savings. How Retirement Contributions Save Taxes: Contributions to these accounts are tax-deductible, reducing your taxable income for the year. Additionally, the investments within these accounts grow tax-deferred, allowing your money to compound faster. Example:  By contributing $100,000 annually to his Solo 401(k) and Defined Benefit Plan, James saved $35,000 per year in taxes while growing his retirement fund. 🔗 Learn about tax-efficient retirement planning . 4. Utilize Tax Credits Tax credits offer a dollar-for-dollar reduction in your tax bill, making them incredibly valuable. Top Tax Credits for Business Owners: R&D Tax Credit : For businesses investing in innovation and development. Work Opportunity Tax Credit : For hiring employees from targeted groups. Energy Efficiency Credits : For adopting sustainable practices in your operations. How to Leverage Tax Credits: Keep Detailed Records : Documentation is key to claiming credits. Consult a Tax Professional : Some credits require complex calculations. Stay Updated : Tax laws change frequently, and new credits may become available. Example:  James claimed $27,000 in tax credits annually, including the R&D Tax Credit and Work Opportunity Tax Credit. 🔗 Discover tax credits for business owners . 5. Pay Estimated Taxes Quarterly Paying estimated taxes helps avoid IRS penalties and keeps your business finances on track. Estimated Tax Tips: Make payments quarterly (April, June, September, January). Base payments on expected income to avoid penalties. Use accounting software or a tax professional to stay organized. Why Quarterly Payments Matter: Missing quarterly payments can result in underpayment penalties. Regular payments also help you manage your cash flow by spreading out your tax obligations throughout the year. Example:  James paid his taxes on time every quarter, avoiding $10,000 per year in penalties that Eric faced due to late payments. 🔗 Get help managing estimated taxes . Case Study A Tale of Two Business Owners: Tax Planning vs. No Planning Meet James and Eric: Two Entrepreneurs, Two Different Outcomes James and Eric both run successful businesses, earning $1,000,000 per year. James owns a manufacturing company, while Eric runs a marketing agency. Both have strong profits, but their approach to tax planning makes all the difference. By age 60, James has $12.5 million in wealth, while Eric struggles with $3.2 million and high tax debt. Here’s how tax strategies changed their financial future. James: The Business Owner Who Used Tax Strategies James understood that taxes were his biggest expense and took a strategic approach to managing them. Step 1: He Chose the Right Business Structure James structured his company as an S-Corp to minimize self-employment taxes. He also took advantage of the Qualified Business Income (QBI) Deduction, allowing him to deduct 20% of his business income, reducing his taxable income from $1,000,000 to $800,000. At a 35% tax rate, this saved him $70,000 per year. Step 2: He Maximized Deductions He deducted $50,000 annually for home office expenses, travel, and marketing costs. He wrote off $80,000 per year for vehicle and equipment purchases using Section 179 depreciation. Total deductions of $130,000 lowered his taxable income to $670,000, saving $45,500 per year in taxes. Step 3: He Contributed to Retirement Accounts James used a Solo 401(k) and Defined Benefit Plan, contributing $100,000 annually. At a 35% tax rate, this saved him $35,000 per year in taxes while building a multi-million-dollar retirement fund. Step 4: He Claimed Tax Credits James took advantage of: The R&D Tax Credit, saving $15,000 annually. The Work Opportunity Tax Credit for hiring employees, saving $12,000 per year. Step 5: He Paid Estimated Taxes James avoided penalties by paying estimated taxes every quarter, preventing surprise IRS bills and saving $10,000 per year. Final Outcome: Financial Success By 60, James had accumulated: Retirement savings: $6M Investment portfolio: $3M Real estate holdings: $2M Cash & liquid assets: $1.5M Total Wealth: $12.5M 🔗 Learn about tax planning for business owners . Eric: The Business Owner Who Didn’t Plan Eric assumed that paying high taxes was just part of being a business owner. He didn’t plan ahead, and it cost him millions over his career. Mistake 1: He Chose the Wrong Business Structure Eric remained a sole proprietor, paying self-employment taxes on all profits. He never took advantage of the QBI Deduction, losing $70,000 in annual tax savings. Mistake 2: He Missed Deductions Eric didn’t track expenses properly, missing out on $45,500+ per year in tax savings from deductions. Mistake 3: He Ignored Retirement Contributions Without a retirement plan, Eric paid taxes on his entire $1M income each year instead of sheltering it in tax-deferred accounts, losing $35,000 annually in potential tax savings. Mistake 4: He Didn’t Use Tax Credits Eric missed out on $27,000+ per year in available tax credits, including the R&D Tax Credit and hiring incentives. Mistake 5: He Paid Taxes Late Because he didn’t plan for quarterly taxes, he was hit with IRS penalties and interest, costing him $10,000 per year. Final Outcome: Financial Struggles By 60, Eric had accumulated: Retirement savings: $1M Investment portfolio: $700K Real estate holdings: $1M Cash & liquid assets: $500K Total Wealth: $3.2M 🔗 Get expert tax planning to avoid these mistakes . The $5.7 Million Tax Planning Gap (Adjusted for Real Tax Savings) Tax Strategy James' Annual Tax Savings Total Over 30 Years Eric's Tax Savings Total Difference QBI Deduction $70,000/year $2.1M $0 +$2.1M Deductions Used $45,500/year $1.365M $0 +$1.365M Retirement Contributions $35,000/year $1.05M $0 +$1.05M Tax Credits $27,000/year $810K $0 +$810K Avoided Penalties $10,000/year $300K $0 +$300K Total Tax Savings $5.7M $0 +$5.7M Because James planned ahead, he ended up $5.7 million wealthier than Eric, giving him financial freedom in retirement. Lessons from James vs. Eric ✅ Start Tax Planning Early – The sooner you start, the more you save. ✅ Use Every Deduction – Track expenses and claim every tax break available. ✅ Maximize Retirement Contributions – Shelter income from taxes while growing wealth. ✅ Claim Tax Credits – These directly reduce taxes and add up over time. ✅ Work with a Tax Professional – Expert guidance pays for itself in savings. 🚀 Want to avoid Eric’s mistakes? Schedule a tax strategy session today . James' tax planning allowed him to retire comfortably at 60, while Eric's lack of preparation forced him to delay retirement and struggle financially. By implementing the tax-efficient, diversified strategies outlined in this blog, entrepreneurs can ensure long-term financial security and avoid a retirement crisis. Want to start planning today? Contact us for a personalized tax strategy. If you are a business owner who is looking to find a financial team that specializes in you, schedule a call, and talk with a Moment founder. Not sure what questions to ask, check out this video on 10 questions you should ask when interviewing a financial advisor. Get in Touch With An Advisor Frequently Asked Questions Here are some answers to questions I received frequently about this topic. Frequently Asked Questions (FAQ) – Tax planning for business owners 1. What are the best tax-saving strategies for small business owners? The best strategies include choosing the right business structure, maximizing deductions, contributing to retirement accounts, utilizing tax credits, and paying estimated taxes quarterly. 2. How does an S-Corp save business owners money on taxes? An S-Corp allows you to pay yourself a salary while taking additional profits as distributions, which are not subject to self-employment taxes, potentially saving thousands annually. 3. What is the Qualified Business Income (QBI) Deduction? The QBI Deduction allows eligible business owners to deduct up to 20% of their qualified business income, reducing their taxable income significantly. 4. What business expenses are tax-deductible? Common deductible expenses include home office costs, vehicle expenses, marketing, travel, office supplies, and health insurance premiums. 5. How can retirement contributions lower my tax bill? Contributions to accounts like a Solo 401(k) or SEP IRA reduce your taxable income, saving you money on your current tax bill while building future wealth. 6. What tax credits are available to business owners? Popular credits include the R&D Tax Credit, Work Opportunity Tax Credit, and Energy Efficiency Credits, which directly reduce your tax liability. 7. Why is it important to pay estimated taxes quarterly? Paying estimated taxes helps avoid IRS penalties and interest charges while ensuring you don’t face a large tax bill at year-end. 8. Can I deduct health insurance premiums as a business owner? Yes, self-employed business owners can deduct health insurance premiums for themselves, their spouses, and dependents. 9. How do I choose the best business structure for tax purposes? Choosing the right structure depends on your income, business size, and goals. Consulting a tax professional can help you decide between LLCs, S-Corps, and C-Corps. 10. What happens if I don’t plan for taxes properly? Failing to plan can lead to overpaying taxes, missing deductions, and facing penalties for underpayment. Proactive tax planning helps avoid these costly mistakes. *Moment Private Wealth offers information on tax and estate planning that is general in nature. Tax and Legal advice are not provided by Moment Private Wealth. Consult an attorney or tax professional regarding your specific legal or tax situation.

Your largest lifetime expense will be your tax bill. Take a moment and let that sink in. The biggest bill you will ever pay will be the one you pay to the IRS. That is the bad news. The good news is you can and should be planning around it. You see tax planning for professional athletes is critical given you have one shot to do this right. In this guide, I am going to give you 7 tax planning strategies for professional athletes. Let's dive in... Professional Athletes - Tax Strategies Consider the earning arc as a professional athlete. You are earning a lifetime worth of income in 3-10 years. Most can see that, but here is what most miss… The uniqueness of your tax bill as you're earning that money. You can go from high income (signing bonus)⬆️ to low income (minor leagues)⬇️ to high income (top league)⬆️ to low income (post-playing)⬇️ all in a decade. That means two things: Your tax planning is going to be unique. You will overpay the IRS without proper planning. Consider me, a professional athlete for 10+ years ~ I estimate that I have overpaid the IRS by a few hundred thousand dollars during my playing career. This was due to me not understanding the two concepts above. I failed to have experts in tax planning for professional athletes and I failed to think proactively about this. I thought, I made money so I will owe taxes on it. While on the surface this is correct, I didn’t think to the next level that there could be (and are) ways for me to legally reduce my lifetime tax bill. So, let’s dive into 7 ways that professional athletes can reduce their lifetime tax bill. 1) Qualified Accounts The easiest and most accessible way for professional athletes to reduce their lifetime tax bill is to maximize their qualified accounts. A qualified account is simply a retirement account. All that means it is a special type of account that the government provides you with either a current-year tax benefit or a future-year tax benefit. Here are my three favorite ones for professional athletes: Roth IRA - A Roth IRA is an individual retirement account that provides you no tax benefit on the money you contribute yet provides tax-free growth and distributions in retirement.   Example: A player can contribute up to $7,000 in 2025 into a Roth IRA. If this money grows to be worth $50,000 at retirement age (59.5) that entire $50,000 amount can be withdrawn tax-free. ***We often implement a backdoor Roth IRA strategy to avoid income limitations.   401(k) – A 401(k) is the most common form of qualified account. There are three versions professional athletes should be aware of. The traditional 401(k), the Roth 401(k), and the Solo 401(k). Depending on the type of income (W2 vs 1099) and a player’s current tax rate should determine which of these three options an athlete should focus on.   Example: In 2024 a player can contribute up to $23,500 as an employee and potentially up to another $46,500 as an employer contribution. This means an athlete could see $70,000 in tax-optimized retirement savings.   HSA – An HSA or Health Savings Account is a special type of account designated for qualified medical expenses. So no it is not a typical “retirement” account but it is an extremely powerful qualified account. It is the only triple tax benefit account, meaning the contribution, growth, and distribution (for qualified medical expenses) are tax-advantaged.   Example: A player needs to be on a high deductible health care plan (common for players post-playing). This provides them eligibility to contribute up to $8,550 as a family to an HSA. This $8,550 contribution gets deducted from their taxable income, grows tax-free, and can be distributed (for qualified medical expenses) tax-free.   2) Tax Loss Harvesting   Consider for a second the fact that an athlete has an opportunity to save far and beyond the limits in just qualified accounts (retirement accounts).   This means you as an athlete will have significant money in taxable accounts. These accounts provide you with the opportunity for further tax planning.   One key element to consider is tax loss harvesting and here is how it works:   Example: You buy a share of a stock for $10 and that stock falls in price to $8. You can sell that position, capture the $2 loss, and immediately rebuy a similar position. This allows you to take your $2 loss and deduct it against your income (saving you money in taxes) while keeping your investment portfolio fully invested.   3) Charitable Giving   Giving is about the heart, not the tax benefit. Yet I have never met anyone who wants to give more money to the IRS and less to their favorite charity.   Remember how we talked about an athlete's earning arc ~ sharp spikes and steep drops?   One way to further take advantage of this is to be strategic about your charitable giving. In short, the most optimal time to give away money is during your playing career when your tax rate is high. Yet, you might want to spread that giving out over decades, long after your player career ends.   This is where a Donor Advised Fund comes in and here is how it works:   Example: A Donor Advised Fund (DAF) is a special type of account that allows someone to give a large sum of money in a given year, get the full tax benefit in that year, and then provides the optionality to distribute that money to charity over time (often years or decades).   ***Pro Tip: You can further maximize this strategy by giving away appreciated stock to get a double tax benefit. If possible, never give away cash as this is the least efficient way to give away money. 4) Tax Efficient Investing   Remember how I talked about as an athlete you have the opportunity to save far more money than qualified accounts allow. Because of this opportunity, you will have significant money in a taxable brokerage account.   Well, this is where tax-efficient investing comes in and plays a key role in reducing your tax bill as a professional athlete. Here is how it works:   Example: If you invest in certain ways, you can defer (push out) the gains from your investments longer. Consider an investment of $5 that grows to be worth $6 at the end of one year. If you can avoid taxes on your one-dollar gain you will have the opportunity to grow your money quicker than if you had to pay 25 cents in taxes that year.   In short, tax-efficient investing is the art of building a portfolio that allows you to control your tax bill, compound your money quicker, and let you keep more of your hard-earned money.   If you are interested in a deeper dive into how we think about investing you can check the Moment Guide to Investing for Professional Athletes.   5) State Residency   Taxes hit you in a few ways as a professional athlete. The first bite goes to the federal government (top tax rate of 37%). The next bite goes to the state in which you either earned the money or you are a resident. This can range from 0% (Florida) to 13.3% (California).   One of the single biggest tax planning moves as a professional athlete is to plan around state residency.   It works like this:   Example: If you can establish residency in a low or no state income tax state such as Florida or Tennessee this could save you hundreds of thousands if not millions of your lifetime tax bill. Consider an athlete receiving a $5,000,000 signing bonus. If that bonus is taxed in FL no state income taxes are due. If that bonus is taxed in California you would owe $665,000.   ***Pro Tip: To navigate and establish state residency work with a qualified financial team that understands the nuances around multi-state taxation and athlete residency.   6) Income Shifting   You either plan now or you will regret it later. That has certainly been true for me with my tax bill and still rings true for nearly every professional athlete we serve.   One of the most proactive ways to plan is to always be running multi-year tax projections.   In short, this means we are working to project what an athlete’s tax bill will be this year, next year, and into the future. When this is done correctly in coordination with an athlete's on-field team (Agency) athletes can potentially look to save big money on their taxes.   Here is how it works:   Example: If an athlete receives a signing bonus of $500,000, the standard payout could be all at once or 50% year 1 and 50% year 2. Yet, what that athlete should be doing is having a qualified team run projections to see if we allocated a specific amount of income in year 1 vs year 2 could save them money on their tax bill.   ***Pro Tip: There is more nuance to this not covered in this blog but just know that if you are blindly allocating income to certain years chances are you will be leaving money on the table.   7) Tax Deductions The Trump tax cuts in 2017 significantly reduced the amount of tax deductions professional athletes could take.   Yet that doesn’t mean there are zero deductions for professional athletes.   The key here is to understand which expenses you incur reflect the type of income you are earning.   Example: All of your off-the-field money (1099 income) and the expenses that incur with that have the ability to be deducted. This is things like travel, food, and agent fees. Your on-field money (W2) does not allow for those same deductions.   ***Pro Tip: Make sure you get an itemized bill from your agent reflecting agency fees for on-field income versus off-field income.   The seven strategies above are level one tax planning. Every professional athlete should be considering these moves. Depending on your situation tax planning as an athlete can significantly reduce your lifetime tax bill.   Yet what is most important is that you are considering (and planning) what ways you can implement to reduce your lifetime tax bill.   After all, it will be your largest lifetime expense.   If you are a future, current, or former professional athlete looking for help reducing your tax bill, let’s talk.   Moment was built to serve the specific needs of professional athletes.   You can book a call today and speak to a founder. Get in Touch With An Advisor Frequently Asked Questions Here are some answers to questions received regarding athletes and money: How does Moment help professional athletes with tax planning ? For us, it is all about presenting strategies to athletes that might make sense for them and then determining what is worth pursuing. What is the biggest tax mistake you see with professional athletes? The biggest mistake we see is not planning in advance. There is a big difference between tax planning and tax preparation. How does Moment work with CPA firms? We work hand in hand with CPA firms that specialize in professional athletes. This way our clients are getting specific advice regarding their tax planning moves. What is unique about tax planning for professional athletes? The short earning arc, multi-state taxation, and income fluctuations provide athletes with circumstances often unique to them. We must account for all of these factors when looking at tax planning for professional athletes. *Moment Private Wealth offers information on tax and estate planning that is general in nature. Tax and Legal advice are not provided by Moment Private Wealth. Consult an attorney or tax professional regarding your specific legal or tax situation.

Designed specifically for retired players, this program offers more than just a safety net. The NFL Annuity program is a game plan for long-term financial stability. In this blog, we will break down how the NFL Annuity Program works, why it's a game-changer for your post-football life, and how you can make the most of it. Before diving in, it is important to understand, retirement planning for professional athletes  doesn't have to start after you stop playing the game. In fact, the sooner you start taking advantage of this benefit, the sooner your financial future will take shape. NFL Annuity Program The National Football League is one of the few employers that continues to include an annuity benefit as a part of its retirement plan. Before specifically diving into the NFL Annuity Program, it is important to understand the basics of an annuity and how it works. An annuity provides a series of regular payments over a set period of time. Essentially, you make an initial investment, and in return, the annuity pays you back with regular payments. The NFL Player Annuity Program helps players save for retirement, just like any annuity. However, the money in these accounts comes from the teams (called "Clubs"), not the players themselves. Said another way, it is a retirement savings plan funded solely by team contributions. Sounds great, but who can participate? Who Can Participate? The NFL Player Annuity Program does have specific requirements for those who can participate. It is open to: Active players with at least one credited season from a previous year. Former players with money in their Tax-Qualified Account. Former players with money in their Non-Qualified Account. NFL Annuity Program Process There are 4 steps to the NFL Annuity Program Process: Money Is Put In: The club contributes money into an account on your behalf. Money is Invested:  The money is then invested and managed by investment professionals. You Become Vested:  After  three or more  Credited Seasons, you become vested. This means you are the full owner of the money and the NFL cannot take it back from you. You Take the Money Out:  When you are no longer an active player and age 45 or older, you can take out the money. *Note: money withdrawn prior to turning 59.5 years could result in a tax penalty. Seems simple enough. But before going any further, I want to better explain what a "Credited Season" is and how a player becomes "vested." Credited Season A Credited Season means you were on one of the following rosters for three or more  regular or post-season games: Active Roster Inactive Roster IR (Injured Reserve) PUP (Physically Unable to Perform) Similarly, if you are released injured or receive an injury settlement for 3 or more games, you earn a Credited Season. Once a Credited Season is earned, you become eligible for most NFL benefits. However, to be entitled to those benefits, you need to earn three or more  Credited Seasons. Simply put, three or more Credited Seasons means you are now "vested." Think of it like levels to a game. -First, you have to make the 53-man roster. -Second, you have to be on said roster for 3 or more games. -Third, you have to earn 3 or more Credited Seasons. With that in mind, we need to further discuss the types of accounts involved and what club contributions include. NFL Annuity Program Accounts and Club Contributions NFL Annuity Program Accounts NFL Players may have money in two types of accounts: Tax-Qualified Account Nonqualified Account This is all dependent on how long a player has been in the NFL and earned their Credited Seasons. A tax-qualified account is an account that holds money that has yet to be taxed. It is the responsibility of the player to pay the taxes once the money is taken out. A non-qualified account is an account that holds money that has previously been taxed, meaning a player won't need to pay taxes on this money when they take it out. The Annuity Program helps players save extra money for retirement, and the way it’s taxed depends on which account the money is in. Additionally, your Club can put money into one or both of your accounts according to your Credited Seasons. But, there are specific rules as to which account you start receiving these Club contributions in. To start, you begin receiving Club contributions to your Tax-Qualified Account once you earn your second Credited Season. Once you earn your fifth Credited Season, you start receiving Club contributions to your Nonqualified Account. Said again, for players with two, three, or four Credited Seasons, you only receive a contribution to your Tax-Qualified Account. This is known as a Qualified Addition . If you have five or more Credited Seasons, you will receive Club contributions to both your Tax-Qualified and Nonqualified Accounts. This is known as a Non-qualified Allocation . NFL Annuity Program Contributions Let's break down the contribution schedule for the 2018-2020 NFL Season. Contributions to the Annuity Program are based on the number of Credited Seasons: One Credited Season: $0 Two-Three Credited Seasons: $2,500 (Tax-Qualified Account) Four Credited Seasons: $50,000 (Tax-Qualified Account) Five or more Credited Seasons: $45,000 (Tax-Qualified Account) + $15,000 (Nonqualified Account, subject to taxes) *Note: These amounts are before taxes are taken out. Of a $15,000 Nonqualified Allocation, $7,200 is withheld to cover income and payroll taxes. It is important to note, the NFL suspended both Qualified Additions and Nonqualified Allocations from any Club for seasons 2020 through 2023. NFL Annuity Program Distributions The Annuity Program was set up so you could take advantage of the money contributed by your team (Club). With that, I want to briefly explain how you can take the money out of the Annuity Program. The four ways to do so include: Single Lump Sum - this is a one-time payment for the entire balance. TQ - available as soon as you are eligible NQ - only after age 45 Partial Lump Sum - this means you receive payment of part of the balance. TQ - available as soon as you are eligible NQ - only after age 45 Installment Payments - this means you will receive the payments in equal installments. TQ - available as soon as you are eligible NQ - annual payments until you reach 45 (or a date of your choosing after that date) Annuities - the balance is used to purchase an annuity from the insurance company. With the annuity, you have a bunch of options Annuity for Your Life Only Qualified Joint and Survivor Annuity Qualified Optional Survivor Annuity Joint and Survivor Annuity To complete one of the above transactions, you must submit a Distribution Form to the NFL Player Benefits Office. Lastly, the amount you receive will depend on the value of your account, but also, how you choose to take your money out. It is important to understand how you will receive your annuity before selecting an option to take the money out. What Next? Father time is undefeated and you will be faced with the reality of your last game sooner than you ever imagined. Before you unbuckle your chinstrap for the last time, make sure you understand your benefits, including the NFL Annuity Program. The NFL Annuity Program can be a game-changer for your post-football life. It is up to you to make the most of it.  Before making any decisions, be sure to consult your financial team and read through the NFL Benefits Package at NFLPlayerBenefits.com or call the NFL Player Benefits office at 800.638.3186. At Moment Private Wealth we are specialists in athlete wealth management ensuring you maximize your league benefits. I also highly suggest checking out the NFL Retirement Plan (2024 Edition) . The NFL Annuity Program is just one of the many benefits afforded NFL players. ___________________________________________________________________________________________________________ If you are in the National Football League and want to better understand the NFL Pension Plan, schedule a call with a Moment Founder . Not sure what questions to ask, check out this video on 10 questions you should ask when interviewing a financial advisor. Get in Touch With An Advisor Frequently Asked Questions Here are some answers to questions I received frequently about this topic. Who can participate in NFL Annuity Program?   Active Players with at least one Credited Season in a Prior Plan Year. When can I start receiving contributions to my NFL Annuity?   You begin receiving Club contributions to your Tax-Qualified Account once you earn your second Credited Season . When can I start receiving my NFL Annuity contributions into my Non- qualified Account ?   This begins if you have five or more Credited Seasons. When do I become vested in the NFL Annuity Program?   You become vested after earning three Credited Seasons. Are there multiple ways to take out my NFL Annuity benefits?   Yes, there are multiple options. Be sure to consult your financial team for the best option for you. ___________________________________________________________________________________________________________ *Moment Private Wealth offers information on tax and estate planning that is general in nature. Tax and Legal advice are not provided by Moment Private Wealth. Consult an attorney or tax professional regarding your specific legal or tax situation.