New England Patriots quarterback and MVP Tom Brady has a lot to celebrate, but one of those things isn’t the huge IRS bill he will receive for winning the Super Bowl.
Brady will like face $60,500 in federal taxes on his winnings, including the 2015 Chevy Colorado he was given as MVP and the pay he received from the NFL for winning the Super Bowl game.
From Americans for Tax Reform:
According to TrueCar.com, the fair market value of a 2015 Chevy Colorado is in the neighborhood of $34,000. This is likely an understatement, since it includes none of the options that Chevy no doubt added to the vehicle.
So Tom Brady will pay ($34,000 x 39.6 percent) in taxes, or $13,500 in income tax on this prize.
But, what happens if Brady decides to give the truck as planned to cornerback Malcom Butler, who made a huge play at the end of the game that cost the Seattle Seahawks the win? More:
Assuming this will be Brady’s only gift to Butler this year, the transaction sets up a taxable gift for Brady of $20,000 (the $34,000 value of the truck minus the $14,000 gift tax exclusion). Assuming Brady has made at least $1 million of taxable gifts up to this point in his life (a safe bet), he will owe a 40 percent gift tax on this $20,000 taxable gift.
So, add that 40 percent — or $5,000 — to the $13,500 he will already owe in taxes for the truck. Brady is already at $18,500 in federal taxes, and he hasn’t even gotten his $97,000 from the NFL for winning the Super Bowl. Factoring in the marginal income tax rate in addition to the Medicare tax, Brady will owe $42,000 on the Super Bowl check alone.
That’s $60,500 total owed to the IRS.
We’re betting Brady wasn’t celebrating this at the Patriots’ victory parade in Boston.
