Juan Soto's Tax Strategy: How He's Saving Millions on His Contract

Juan Soto's Tax Strategy: How He's Saving Millions on His Contract.

Juan Soto joined the New York Mets earlier this month, landing the biggest contract in MLB history. He could earn up to $765 million over the next 15 years. The deal features a $75 million signing bonus and $305 million in the first five years. It's a massive contract, but Soto is the kind of player who can take a team to the World Series, which is exactly what the Mets need right now.

However, Soto won't pocket all that cash. A significant portion will go to taxes, plus there are agent fees to think about. So, even with such a huge deal, finding ways to save millions is definitely a smart move.

Thanks to the tax laws in different states, Soto stands to save over $8 million this coming season.

Soto is currently residing in Florida, where there’s no state income tax. This means that most of his $75 million bonus will be hit with a 37% federal tax, which is the highest rate. The top bracket kicks in at $578,125, so he’ll be taxed at lower rates until he hits that threshold.

If he were living in New York, he’d face a 10.9% tax rate, which applies to anyone earning at least $25 million in a year. It’s pretty clear that Soto’s $75 million bonus far exceeds that. After federal taxes, he’ll take home about $47.25 million, but he would also have lost another $8.17 million to state income taxes.

The rest of Soto’s contract will be taxed based on where he plays. Since most of his games will be in New York, he can’t avoid the state income tax on his salary. The Mets do have some games in states without income taxes, like when they face the Florida Marlins, so Soto and his teammates won’t owe state taxes for those games.

Soto might eventually decide to move to New York, but for now, living in Florida is definitely paying off for him.

Juan Soto’s savvy tax strategy, including his decision to reside in Florida, demonstrates how athletes can maximize their earnings while navigating complex tax laws. By avoiding state income tax on his massive $75 million signing bonus, Soto is ensuring that a larger portion of his record-setting $765 million contract stays in his pocket.

His decision to live in Florida, combined with his immense talent on the field, positions him to enjoy both financial and professional success. As Soto continues to make an impact with the New York Mets, his smart financial planning ensures that he’s well-prepared for the future.

LATEST: Jim Carrey’s L.A. Mansion Sells After Shocking $10M Price Drop.