Superstar NFL prospect Caleb Williams is expected to nab a four-year, $40 million deal when he is selected in this year’s NFL draft, which begins on April 25.
However, not all of that money will end up in the young quarterback’s pocket.
It is expected that the Chicago Bears will pick Williams No. 1 overall in the draft. If that happens, he will likely owe $1.55 million in state and local taxes on the income he earns in his first year in the NFL, according to a Tax Foundation analysis.
Much of Williams’ contract of $40 million is expected to be in the form of a signing bonus of $25 million. That will bring his first-year salary to about $28.75 million, which explains the large tax bill he’d face for the year if he lived in Chicago.
However, the picture changes if the unexpected happens and Williams ends up with another team. Here is how much Williams will likely have to pay in state and local taxes during his first year if one of the following teams selects him:
- Chicago Bears: $1.55 million
- San Francisco 49ers: $3.79 million
- Atlanta Falcons: $1.61 million
- Las Vegas Raiders: $336,000
Other players also may face stiff tax bills if they end up with a team in a city or state where taxes are high.
The Tax Foundation says, for example, that a player who earns $1 million and plays for Florida’s Jacksonville Jaguars would only have to pay an estimated $5,199 in state and local taxes. At the other extreme, that same player would owe $104,082 in taxes if he suits up with the 49ers or a Los Angeles team.
Few of us are going to make $40 million any time soon. But as those numbers clearly show, where you live plays a huge role in how much of your income you get to keep, especially if you pull in a lot of money.
Over time, living in a lower-tax area can save you money that can make a huge difference to your net worth.
Of course, some folks are more than willing to sacrifice some personal wealth for what they view as better services in higher-tax states. Others don’t mind paying a bit more in taxes if that money is used to help the poor and others who struggle.
But if you want to substantially boost your own net worth, it might pay to avoid living in one of the “15 Cities Where Workers Pay the Most in Taxes.”
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