Otule's Improvement

[Tugg Speedman]

He should do what he wants to do.

He also should do lots of research to see if "play for pay" in his case means a decent living or a substandard one. Lots and lots of overseas pros make nowhere near six figures.

Like you, I wish him nothing but success.

+1

Guys here grotesquely over estimate the money that can be made overseas.  You play overseas for largely two reasons,

1. You are not qualified to do anything else and you make barely enough to survive but hey it beats driving a taxi.

2. As an alternative to the NBDL and you're still trying to improve to get into the league.  See DJO is St. Peterberg.

Otule is not in either of these categories.

[4everwarriors]

Not too many recent Marquette grads making $80K per year.  A lot of them are back living with their parents and working at what used to be their summer job.  And Chris won't have any student loans to pay off.

That's what a presidential candidate was sayin', aina?

[Tugg Speedman]

MU82

Tax free money if living overseas. Making 80K with living expenses covered and no taxes is not a bad deal for young guy.

Where did you come up with this?  Where did you get 80k?  Who covers living expenses?  Why is it tax free?  It is the opposite, you get screwed by paying us and your country's taxes, it is the opposite.

And even if you're right, this assumes your body can make it through a 70 to 80 game season.  Otule cannot assume that.

[warriorchick]

That's what a presidential candidate was sayin', aina?

He was right.

[MU82]

I love spending pro team owners' money, so I enjoy saying the Cubs should sign so-and-so or the Lakers should trade for a high-paid star.

I don't love telling an individual what personal choices he or she should make. Which is why, again, I say the only thing Otule should do is whatever he wants to do.

As a Marquette fan, I hope he returns because he's a valuable center and a great team guy. As a fellow human being and a father of two kids about Otule's age, I hope he does whatever puts him on track for a happy, satisfying life.

[T-Bone]

He should stick around and work on a post-graduate degree.  Rack up those credits while they're free.

[Goose]

Another MU84


You do not sound very sure on your post. Is it double taxed or tax free?

[Tugg Speedman]

Another MU84


You do not sound very sure on your post. Is it double taxed or tax free?

If you maintain you US citizenship, you pay US taxes AND the country taxes plus most European country's have an 18% VAT (sales tax).  So, expect about 60% to 2/3rd of your salary to be gone in taxes.  Also, you have to declare a state you live in.  That is usually the last state you lived in.  So MU players playing overseas also pay WI state taxes too.  In the case of Otule, he might be able to declare Texas but he is no longer a minor so I'm not sure how that works (about which state you must declare)

If you give up your US citizenship, you escape US taxes.  But former Americans that give up their US citizenship are only allowed in the country 30 days a year.  Stay the 31st day and you're declared a US Citizen again and immediately hammered with US taxes for that year.

The US punishes Americans living overseas.

[Goose]

Another MU84


You sure about that?

[Tugg Speedman]

Another MU84


You sure about that?

Goose, if we did not punish Americans living overseas, million of Americans would leave.  That is why we do it.

[Goose]

Punish American's for living abroad? At one time I had three family members living in three different continents trying to earn a living. I think there leaving their family's to earn a living might be punishment enough. Not going to argue this one with you...last post pretty much summed your point.

[AZWarrior]

If The Lanche and Lenny's are still open he stays. It is problematic otherwise.

Real Chili, too.

Save Real Chili!

[🏀]

If you maintain you US citizenship, you pay US taxes AND the country taxes plus most European country's have an 18% VAT (sales tax).  So, expect about 60% to 2/3rd of your salary to be gone in taxes.  Also, you have to declare a state you live in.  That is usually the last state you lived in.  So MU players playing overseas also pay WI state taxes too.  In the case of Otule, he might be able to declare Texas but he is no longer a minor so I'm not sure how that works (about which state you must declare)

If you give up your US citizenship, you escape US taxes.  But former Americans that give up their US citizenship are only allowed in the country 30 days a year.  Stay the 31st day and you're declared a US Citizen again and immediately hammered with US taxes for that year.

The US punishes Americans living overseas.

The US has a foreign tax credit. If you paid for taxes in the country you live (France, Germany, Dubai), you are credited this amount back by the US.

[ChicosBailBonds]

Another MU84


You do not sound very sure on your post. Is it double taxed or tax free?

I guess I would like some clarity on this as well.  We were expats for four years in Central and South America growing up and my dad had always stated the taxes were outrageous considering we didn't live in the States but had to pay them back to Uncle Sammy anyway.  Now, this was several decades ago so maybe things have changed.  As far as I know, expats have to file US Income taxes on their worldwide income.  In some countries, I believe, the taxes are not paid due to treaties and such (credits, etc), but that isn't the case in all countries.  That's my recollection.

[AZWarrior]

The US has a foreign tax credit. If you paid for taxes in the country you live (France, Germany, Dubai), you are credited this amount back by the US.

That's what I understood (but wasn't certain about).  So if a B-ball player's salary puts him in a 35% US bracket, and he pays, say 25% to Italy for their income tax, he would still owe Uncle Sam an additional 10%, right?

[ChicosBailBonds]

They will exact their pound(s) of flesh

http://business.time.com/2012/06/22/renouncing-your-citizenship-to-stick-it-to-the-tax-man-not-as-easy-as-it-looks/

[🏀]

That's what I understood (but wasn't certain about).  So if a B-ball player's salary puts him in a 35% US bracket, and he pays, say 25% to Italy for their income tax, he would still owe Uncle Sam an additional 10%, right?

That's how I always understood it, in a dumbed down version.

I think he still has to pay Uncle Sam 35%, but can deduct the 25% he paid to Italy.

[Tugg Speedman]

Punish American's for living abroad? At one time I had three family members living in three different continents trying to earn a living. I think there leaving their family's to earn a living might be punishment enough. Not going to argue this one with you...last post pretty much summed your point.

Believe me I'm not in favor of this policy at all.  I have a business partner is Switzerland and when he explains the policies to me, and the double taxes he pays, it is hair raising.

And we have not even approached the subject of getting paid in Euros (or Swiss Francs or Russian Rubles) and then watch it lose 5% to 10% against the dollar ... you get a 5% to 10% reduction in pay.  (anyone playing in Argentina?  They just devalued by 46% last week, so you just lost half your pay in US dollars)

Your earlier post makes it sound like you take home your gross pay ("$80k tax free") ... it is the opposite, you pay more in taxes on earnings living overseas than in the US and take a currency risk too.

To the larger point here.  Let me repeat, you go play in Europe because you can do nothing else or because it is a better option than the NBDL to get into the league.  Neither fits Otule.

[Tugg Speedman]

That's what I understood (but wasn't certain about).  So if a B-ball player's salary puts him in a 35% US bracket, and he pays, say 25% to Italy for their income tax, he would still owe Uncle Sam an additional 10%, right?

Correct but Europe relies on a VAT (value added tax or "sales tax") which averages 18%.  So, you pay maximum US income taxes even if you can avoid income taxes in your country, and then you pay in extra 18% for everything you buy.  You get screwed.

[Tugg Speedman]

I guess I would like some clarity on this as well.  We were expats for four years in Central and South America growing up and my dad had always stated the taxes were outrageous considering we didn't live in the States but had to pay them back to Uncle Sammy anyway.  Now, this was several decades ago so maybe things have changed.  As far as I know, expats have to file US Income taxes on their worldwide income.  In some countries, I believe, the taxes are not paid due to treaties and such (credits, etc), but that isn't the case in all countries.  That's my recollection.

CBB they rules were changed in the late 1990s when a bunch of zillionaires were leaving the US for Ireland to escape taxes.

[Pakuni]

Where did you come up with this?  Where did you get 80k?  Who covers living expenses?  Why is it tax free?  It is the opposite, you get screwed by paying us and your country's taxes, it is the opposite.

And even if you're right, this assumes your body can make it through a 70 to 80 game season.  Otule cannot assume that.

Actually, clubs in Europe typically pay their players' local taxes and then the player gets credit for that when it comes time to pay Uncle Sam twice (hence no double taxation). They might have to pay some additional state and federal taxes back home, but it's far from the full hit.
Also, Euro clubs often provide players with housing and a car on top of their salary.

Chris should do what Chris wants to do, but it's not the least bit unreasonable to expect that after five years in college he might want start being paid for his efforts.

[Tugg Speedman]

Actually, clubs in Europe typically pay their players' local taxes and then the player gets credit for that when it comes time to pay Uncle Sam twice (hence no double taxation). They might have to pay some additional state and federal taxes back home, but it's far from the full hit.
Also, Euro clubs often provide players with housing and a car on top of their salary.

Chris should do what Chris wants to do, but it's not the least bit unreasonable to expect that after five years in college he might want start being paid for his efforts.

Europe has several levels of leagues.  You're describing the top leagues that are luring guys away from the NBDL and/or 10 day contracts from the NBA.  If you think Otule is that caliber, then he should entry the draft this spring.   When you get into the second and third tier leagues, then get much less and none of these perks.

[Goose]

I believe that Keefe can provide the best answer regarding taxes and living expenses.

As for "getting screwed" Another MU84, I have yet to meet a person that worked abroad that did not find it to be worthwhile experience. Everything is relative, if living expenses are covered paying 18% VAT on purchases does not seem so bad to me.

[MURFC]

If you maintain you US citizenship, you pay US taxes AND the country taxes plus most European country's have an 18% VAT (sales tax).  So, expect about 60% to 2/3rd of your salary to be gone in taxes.  Also, you have to declare a state you live in.  That is usually the last state you lived in.  So MU players playing overseas also pay WI state taxes too.  In the case of Otule, he might be able to declare Texas but he is no longer a minor so I'm not sure how that works (about which state you must declare)

If you give up your US citizenship, you escape US taxes.  But former Americans that give up their US citizenship are only allowed in the country 30 days a year.  Stay the 31st day and you're declared a US Citizen again and immediately hammered with US taxes for that year.

The US punishes Americans living overseas.

For federal tax purposes, you get a foreign earned income exclusion up to $97,600.  That means you pay local taxes up to $97,600.  Beyond that you are required to pay in both jurisdictions.  I lived in Europe for three years and while I was subject to higher European taxes, I was not penalized by Uncle Sam (my salary was below the exclusion limit).

http://taxes.about.com/od/taxhelp/a/ForeignIncome.htm

http://www.irs.gov/uac/2013-Inflation-Adjustments-to-Various-Tax-Benefits

[Tugg Speedman]

I believe that Keefe can provide the best answer regarding taxes and living expenses.

As for "getting screwed" Another MU84, I have yet to meet a person that worked abroad that did not find it to be worthwhile experience. Everything is relative, if living expenses are covered paying 18% VAT on purchases does not seem so bad to me.

I do, but of course, I know married people raising children overseas, have lived overseas for decades and want to hold their US citizenship and feel like the US Government is giving them the shaft.  Now they could change that and move back but they do not, but that does not mean they like it.

Regarding your "worthwhile experience."  Yes, it is, just like studying abroad a year ... it is fun and would recommend to every "kid" without hesitation.  

That said, this is about Otule, not living overseas.  If I'm generous, his body allows him to get through 2 foreign seasons of 70 to 80 games.  Estimating what I think he gets paid and if he lives just above poverty, he comes back to the US at 26 or 27 with 50k to 100k in his pocket.  Then what does he do the next 60 years?

If he is looking to maximize his potential future income, I'm guessing staying at MU a 6th year and getting an advance degree "on the house" and starting his non-basketball life offers him more potential.  The only reason I see him "moving on" is he no longer likes playing for MU, which does not seem to be the case.