California now has the dubious distinction of being the state with the highest top marginal tax rate for residents considered "wealthy." Thanks to the passage of Proposition 30 last November, rates for those earning over a million dollars rose from 9.3 percent to 12.3 percent, retroactive to the beginning of 2012. That's not all. There's another 1 percent for the same income level, which is called a "mental health surcharge," bringing the rate up to 13.3 percent. For 2013, add to that the increase in federal tax rates on higher income individuals, and the extra 3.8 percent Medicare tax, and that's a bundle of money to leave on the table.
For CPA Robert A. Raiola, the tax issues that celebrities like Mickelson face are an everyday concern. Raiola heads the Sports & Entertainment Group for the New Jersey-based accounting firm of Fazzio, Mannuza, Roche, Tankel, LaPilusa LLC. Using an estimated income of $45 million for each year for Mickelson, he ran the state and federal income tax numbers, and here's what he found:
- In 2011, an effective rate of 41.6 percent for a combined tax of $18,716,085.
- In 2012, an effective rate of 43.5 percent, for a combined tax of $19,578,810.
- In 2013, an effective rate of 49.6 percent for a combined tax of $22,310,231.
Source: AccountingWeb. Read full article. (link)