UnderGround Forums Wise tax advice for fighters

13 days ago
1/1/01
Posts: 65227

UFC welterweight Mike Perry recently indicated that he owed the IRS, and implored the UFC to withhold more. That led to some sage advice on the social network.

h/t Jed Meshew for MMA Fighting

13 days ago
8/19/03
Posts: 28998

Pretty crazy stuff.   

 

MMA is a tough life before you even get into the cage. 

 

Respect to those who do it, because it certainly isnt financially viable for most participants.  

13 days ago
11/10/18
Posts: 8370
WaltJ -

Pretty crazy stuff.   

 

MMA is a tough life before you even get into the cage. 

 

Respect to those who do it, because it certainly isnt financially viable for most participants.  

What do you do for a living that this surprised you? Because the exact same shit happens to my earnings. 

13 days ago
7/22/05
Posts: 60531

No corner, no costs. Smart man that Perry.

13 days ago
8/19/03
Posts: 28999
Eskimo -
WaltJ -

Pretty crazy stuff.   

 

MMA is a tough life before you even get into the cage. 

 

Respect to those who do it, because it certainly isnt financially viable for most participants.  

What do you do for a living that this surprised you? Because the exact same shit happens to my earnings. 

I don't pay for a fight camp, corner men, or manager fees to show up to my job.  I also don't incur brain damage to do so.

 

Basically, my post was code for saying you pretty much have to be either be woefully ignorant or not incredibly bright to try to make full time career out of MMA.   To get to an earning level of some of the fighters on this thread, like an Eddie Alvarez or Ben Askren isn't likely for most people by any stretch. 

 

Not even to mention that the contract negotiating environment is completely one-sided in favor of the UFC, so even if you can get to that level, the financial prospects still aren't staggeringly good. 

 

Its just not an easy industry.  As Dana says, it is merely an opportunity, not a career. 

13 days ago
1/1/01
Posts: 38919

I always have concerns whenever I watch UFC Countdown and a fighter who I know is not a top earner is driving a really really nice car.  

13 days ago
1/1/01
Posts: 23591

Quoting 25% for management and training fee, not sure how common that is but ATT is 5% for both.  I'd be going there for sure if I was a pro.

13 days ago
11/10/18
Posts: 8377
WaltJ -
Eskimo -
WaltJ -

Pretty crazy stuff.   

 

MMA is a tough life before you even get into the cage. 

 

Respect to those who do it, because it certainly isnt financially viable for most participants.  

What do you do for a living that this surprised you? Because the exact same shit happens to my earnings. 

I don't pay for a fight camp, corner men, or manager fees to show up to my job.  I also don't incur brain damage to do so.

 

Basically, my post was code for saying you pretty much have to be either be woefully ignorant or not incredibly bright to try to make full time career out of MMA.   To get to an earning level of some of the fighters on this thread, like an Eddie Alvarez or Ben Askren isn't likely for most people by any stretch. 

 

Not even to mention that the contract negotiating environment is completely one-sided in favor of the UFC, so even if you can get to that level, the financial prospects still aren't staggeringly good. 

 

Its just not an easy industry.  As Dana says, it is merely an opportunity, not a career. 

Yep it’s not extremely lucrative and all those problems are pretty well known. I have to assume it’s still the best opportunity most of these guys have. I’ve always said that lots of guys(more than other sports) that could be top notch fighters and even champs never train past the hobby level because they have good jobs. I’ve trained for over 20 years and about half the time the guys fighting pro from those gyms absolutely weren’t the best fighters in the gym, but they were the only ones willing. It’s hard to imagine things changing when no other league has been able to compete with the ufc. Clearly it’s either not a lucrative sport or it’s only lucrative enough for one greedy promotion lol. 

13 days ago
4/21/12
Posts: 9907
Eskimo -
WaltJ -

Pretty crazy stuff.   

 

MMA is a tough life before you even get into the cage. 

 

Respect to those who do it, because it certainly isnt financially viable for most participants.  

What do you do for a living that this surprised you? Because the exact same shit happens to my earnings. 

Sort of.

Self-employed people have to pay the part of Social Security and Medicare taxes that an employer would pay on behalf of an employee. So, independent contractors (fighters) are hit with an approximate 7.5% additional tax to pay SSI and Medicare, although there is a small offset against gross income that reduces your federal income tax slightly. 

13 days ago
12/28/05
Posts: 1805

Interesting how grown adults dont know the basics about taxes. I was 14 when I got my first paycheck and you know I learned quick.

Even if a pro fighter who never had a regular job should at least know Uncle Sam gets his cut.

13 days ago
9/22/11
Posts: 7999
jakeb -

Interesting how grown adults dont know the basics about taxes. I was 14 when I got my first paycheck and you know I learned quick.

Even if a pro fighter who never had a regular job should at least know Uncle Sam gets his cut.

Yeah l am pretty sure all fighters know they have to pay taxes on their meager winnings.

Edited: 12 days ago
1/9/11
Posts: 844
Tug Dabone -
Eskimo -
WaltJ -

Pretty crazy stuff.   

 

MMA is a tough life before you even get into the cage. 

 

Respect to those who do it, because it certainly isnt financially viable for most participants.  

What do you do for a living that this surprised you? Because the exact same shit happens to my earnings. 

Sort of.

Self-employed people have to pay the part of Social Security and Medicare taxes that an employer would pay on behalf of an employee. So, independent contractors (fighters) are hit with an approximate 7.5% additional tax to pay SSI and Medicare, although there is a small offset against gross income that reduces your federal income tax slightly. 

There are still a large amount of white/blue collar people doing contract labor as a self employed person. This isn't news to us. 

 

This may be news to fighters, but no surprise there...

 

 

13 days ago
3/22/16
Posts: 1381
the_decimator - 
Tug Dabone -
Eskimo -
WaltJ -

Pretty crazy stuff.   

 

MMA is a tough life before you even get into the cage. 

 

Respect to those who do it, because it certainly isnt financially viable for most participants.  

What do you do for a living that this surprised you? Because the exact same shit happens to my earnings. 

Sort of.

Self-employed people have to pay the part of Social Security and Medicare taxes that an employer would pay on behalf of an employee. So, independent contractors (fighters) are hit with an approximate 7.5% additional tax to pay SSI and Medicare, although there is a small offset against gross income that reduces your federal income tax slightly. 

There are still a large amount of white/blue collar people doing contract labor as a self employed person. This is isn't news to us. 

 

This may be news to fighters, but no surprise there...

 

 


Exactly. I have been self employed for 15 years now and I always knew I HAD to pay taxes on my earnings.

You can find ways to lower your gross, and ultimately not pay as much as expected. My adjusted gross, is usually around 50% of my total gross. So I only pay taxes on that amount. Things like management fees, etc are all write offs, so you are not paying taxes on the fees you pay your management, gym, etc. Also depending on where you live, things that normal people cant write off like phone, rent, travel, etc all help lower your adjusted gross. GET A GOOD CPA!!
Edited: 13 days ago
8/19/03
Posts: 29001
Don J -
the_decimator - 
Tug Dabone -
Eskimo -
WaltJ -

Pretty crazy stuff.   

 

MMA is a tough life before you even get into the cage. 

 

Respect to those who do it, because it certainly isnt financially viable for most participants.  

What do you do for a living that this surprised you? Because the exact same shit happens to my earnings. 

Sort of.

Self-employed people have to pay the part of Social Security and Medicare taxes that an employer would pay on behalf of an employee. So, independent contractors (fighters) are hit with an approximate 7.5% additional tax to pay SSI and Medicare, although there is a small offset against gross income that reduces your federal income tax slightly. 

There are still a large amount of white/blue collar people doing contract labor as a self employed person. This is isn't news to us. 

 

This may be news to fighters, but no surprise there...

 

 


Exactly. I have been self employed for 15 years now and I always knew I HAD to pay taxes on my earnings.

You can find ways to lower your gross, and ultimately not pay as much as expected. My adjusted gross, is usually around 50% of my total gross. So I only pay taxes on that amount. Things like management fees, etc are all write offs, so you are not paying taxes on the fees you pay your management, gym, etc. Also depending on where you live, things that normal people cant write off like phone, rent, travel, etc all help lower your adjusted gross. GET A GOOD CPA!!

Stuff like this has always lead me to question how many "real" managers exist in sports like MMA, because what you just wrote is what you would expect any manager in any real, professional field to ask questions about and to set their people up with.

 

I suspect that a lot of managers in MMA are probably hangers on or just a fighter's buddy who doesn't really know shit about how to negotiate contracts, set up promotional agreements, handle tax reporting, do financial advising, and really look after affairs.  Or even if nothing else, to have the knowledge, wherewithal, and connections to facilitate those things, at least.

 

 

13 days ago
11/10/18
Posts: 8379
Tug Dabone -
Eskimo -
WaltJ -

Pretty crazy stuff.   

 

MMA is a tough life before you even get into the cage. 

 

Respect to those who do it, because it certainly isnt financially viable for most participants.  

What do you do for a living that this surprised you? Because the exact same shit happens to my earnings. 

Sort of.

Self-employed people have to pay the part of Social Security and Medicare taxes that an employer would pay on behalf of an employee. So, independent contractors (fighters) are hit with an approximate 7.5% additional tax to pay SSI and Medicare, although there is a small offset against gross income that reduces your federal income tax slightly. 

I know, I own a business. But they also can write off all of their training expenses right down to the mileage they drive to the gyms they go to. 

13 days ago
1/1/01
Posts: 1300

It is not necessarily wrong but you need to acknowledge it is "the way it is" and not be under the impression that an MMA career is smooth sailing once you are under one of the major organizations. If fans don't get it, no biggie but aspiring fighters need to know. 

 

Out of all fighters very few live comfortably fighting, most don't. You may be a special character like for example a "mediagenic" female who has plenty extra income that comes with every eyeball and then you are fine but for the others who are clawing their way to the big stage they probably have to have a job. Not a side job but a proper job and fighting is the side gig and it just costs money at this point. Then at some point you will have to give up that job and focus on training because after all it's not a hobby if you want to keep climbing, you need to invest your time into getting better. Now you may need a side job to make ends meet so you can't make 3 of the 12 training sessions you should go to and you are struggling. Once you get to the UFC you may need to only train and nothing else if you should have a realistic chance to keep winning and keep getting better.

As for taxes, how much do you pay in taxes in the states really? I live in Sweden and although it varies between "states" 35 % of my pay goes to taxes when I am employed where I live. Now I have my own company and then about 50 % of what the company earns can end up in my pocket. Askren talks about 30-50 percent which sounds weird to me, I was always under the impression that the US was a tax haven (or heaven?) compared to here.

13 days ago
8/20/03
Posts: 153519

The LLC seems to be the best way to go for fighters.

Am I wrong?

13 days ago
10/11/18
Posts: 2045
ttt
13 days ago
1/1/01
Posts: 10577

I have to disagree with most of this. Most fighters who complain don't treat it like a business, the ones who do, realise it's a great way to make a living. It's a hell of a lot easier than most 9-5 jobs and much more lucritive. 

For example, compared to most sports you only need to have 5 years training to get on TV. That is unheard of. Even my laziest fighter (business wise) got 35K instagram followers from being in the UFC. He had 5 years training from scratch.

When you go into this business you need 3 good people on your side:

1. Accountant

2. Lawyer

3. Coach

Largely young fighters do not need a manager or an agent, unless they work off no fee (and the good agents will do commission only because they know they will get you the sponsors). You can't negotiate with the UFC anyways until you have pull are an exception like Israel. 

The tax is high, but if you have a good accountant you can be smart about it. 

First year out you are going to make around 100K USD unless you lose all 3, in which case you'll need to look for another job regardless. (I think this point is overlooked...sometimes you have to realise this career isn't for you. Instead people complain). 

If you have a good team and Coach who believes in you, 15% will be their fee (some do lower, some higher) and that will include your camp. 

You won't make big bucks until 2-3 years, but you are WAY above the average employment rate, with very little study and experience compared to other sports/jobs. 

If you knuckle down, get a financial education, work your social media and brand, you will be set for life after 2-3 years. It will make getting a job ANYWHERE much easier. One of my guys now works at the UFC PI and lives very comfortably, loves his life. He was 2-3 in the UFC. He's 30 now. 

To this day, I see one of my old female UFC fighters still living off being a UFC fighter. (Cars, meals, sponsorships, public appearances, brands, youtube channels, Twitch)

 

If you don't leverage it, that's your problem. 

13 days ago
1/1/01
Posts: 10578

Another point:

Most of the managers out there are predatory assholes who will have 30-100 young fighters and just convince them to take any fight so they can get their cut. For example, Maurice from Firstroundmanagement should be in jail. I've watched him repeatedly con a young fighter until his career ended...but that's another post. 

13 days ago
8/20/03
Posts: 153527

It's also about knowing when and where to leverage things.

Like, if the fighter teaches private lessons, some people like to pay via cheque or some type of traceable payment. Some do not. So you decide how much you claim on your taxes in income and how much you just keep as cash under the table.

But you absolutely have to claim every deduction you can and every fee possible. That goes for ANY job.

13 days ago
9/8/10
Posts: 14994

I don't get how so many fighters are completely unaware taxes are a thing? Haven't they had other jobs in their lives?

13 days ago
3/19/11
Posts: 7958
McBottery -

I don't get how so many fighters are completely unaware taxes are a thing? Haven't they had other jobs in their lives?

I think the problem is they have, and are expecting the taxes to be taken out before they receive their money. 

Edited: 13 days ago
3/19/11
Posts: 7959
dubs
13 days ago
5/26/14
Posts: 4413
Don J -
the_decimator - 
Tug Dabone -
Eskimo -
WaltJ -

Pretty crazy stuff.   

 

MMA is a tough life before you even get into the cage. 

 

Respect to those who do it, because it certainly isnt financially viable for most participants.  

What do you do for a living that this surprised you? Because the exact same shit happens to my earnings. 

Sort of.

Self-employed people have to pay the part of Social Security and Medicare taxes that an employer would pay on behalf of an employee. So, independent contractors (fighters) are hit with an approximate 7.5% additional tax to pay SSI and Medicare, although there is a small offset against gross income that reduces your federal income tax slightly. 

There are still a large amount of white/blue collar people doing contract labor as a self employed person. This is isn't news to us. 

 

This may be news to fighters, but no surprise there...

 

 


Exactly. I have been self employed for 15 years now and I always knew I HAD to pay taxes on my earnings.

You can find ways to lower your gross, and ultimately not pay as much as expected. My adjusted gross, is usually around 50% of my total gross. So I only pay taxes on that amount. Things like management fees, etc are all write offs, so you are not paying taxes on the fees you pay your management, gym, etc. Also depending on where you live, things that normal people cant write off like phone, rent, travel, etc all help lower your adjusted gross. GET A GOOD CPA!!

This.  As a fighter theres an ungodly amount of write-offs.  If done properly and thoroughly, they should be paying little to 0 taxes. 

 

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