Elevating Athlete and Entertainer Tax Services to New Heights NEW KENT COUNTY, VA — ProSport CPA, a leader in tax and accounting services for professional athletes and entertainers, is delighted to announce its integration into the Carr, Riggs & Ingram (CRI) Family of Companies. This strategic union combines ProSport CPA’s specialized tax and accounting services with CRI's expansive national capabilities, ensuring exceptional, unparalleled service. John Karaffa, CEO of ProSport CPA, commented on the merger, stating, "Joining the CRI family empowers us to access a broader array of resources while continuing to deliver the boutique-level service our clients appreciate. This collaboration not only enhances our service capabilities but also equips us to adeptly manage the increasingly intricate tax, accounting, and business management needs of our elite clientele in the realms of sports and entertainment. Game On!" Allan D. Koltin, CEO of Koltin Consulting Group, who advised both firms on the merger, stated, “John Karaffa and his team are recognized as top-tier tax advisors nationwide, serving professional athletes across all major sports. This union with CRI is a significant gain, instantly positioning them on the competitive ‘playing field.’ ProSport CPA, sought after by many leading firms, chose CRI for its compatible culture and the promising growth opportunities for its staff. This alliance not only strengthens their capabilities but also expands the expertise and resources available to ProSport CPA’s clientele.” Bill Carr, Managing Partner of CRI’s Family of Companies, added, "Integrating ProSport CPA into the CRI Family of Companies marks a pivotal expansion of our specialized services for the sports and entertainment sectors. ProSport CPA brings a wealth of specialized knowledge that complements our existing services, positioning us uniquely to address the sophisticated needs of our clients and set new standards in the industry." Over the past 25 years, CRI has evolved to meet the diverse needs of its clientele by integrating a range of specialized portfolios. These entities synergize to offer comprehensive, customized advice and services tailored to ensure optimal financial health for each client. For more information about the enhanced services and benefits of this merger, please visit ProSportCPA.com and CRIcpa.com. About ProSport CPA Located in New Kent County, Virginia, ProSport CPA offers personalized tax preparation, accounting, and business management services tailored for professional athletes and entertainers. Dedicated to maximizing wealth and ensuring compliance with tax laws, ProSport CPA is trusted by clients and their advisory teams across all major sports leagues and the entertainment industry. Discover why they are The Tax Pro for the Pros® at ProSportCPA.com. About Carr, Riggs & Ingram, LLC CRI is a CPA and advisory firm located in 35+ markets throughout Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, New Mexico, North Carolina, Oklahoma, South Carolina, Tennessee, and Texas. CRI's industry specializations include construction, government, banking/financial institutions, healthcare, insurance, not-for-profit, manufacturing, and distribution. CRI offers traditional and specialized services, including audit and assurance, business outsourcing and support, forensic accounting, IT auditing, retirement plan auditing, SEC compliance, business valuation, tax planning, and trusts and estates work. Additionally, CRI's portfolio companies deliver service organization control (SOC) reports, data analytics, investment banking, retirement administration services, business consulting, wealth management, payroll management, and trust and estate services. CRI is a top 25 nationally ranked accounting firm. For additional information, please visit CRIcpa.com.

By Dr. John Karaffa, CPA/PFS, CFP®, President of ProSport CPA PLLC Successful college athletes are often treated like heroes on their campuses. They might feel like stars around town, and the 2 percent who are offered professional contracts will continue to attract attention. But heading into professional sports will come with more than a nice salary, as the tax authorities are keenly interested in garnering tax revenue from professional athletes. These young women and men will be facing some big decisions and others will want a piece of their fortune and success. They can help to protect themselves with a basic understanding of tax laws and how they are affected moving from the college ranks to the pros. Taxes Are the Biggest Expense Taxes will be a new pro’s biggest expense moving into adulthood. It’s the truth that everyone faces. For the average professional athlete, 40-50% of their annual salary will go to the government. Whether they are making thousands or millions, their goal should be to pay the lowest legal amount of tax. In 2013, the tax burden for professional athletes and other high-income taxpayers increased. The top marginal US Federal income tax rate rose from 35% to 39.6%. United States Social Security taxes reverted back to 6.2% in 2013 from 4.2% in 2012. In California, the millionaire’s surtax brought the top rate to 13.3%. The enactment of the Affordable Care Act carried some additional taxes for the wealthy: An additional 0.9% Medicare surcharge tax on single individuals earning more than $200,000; An extra 3.8% levied on Net Investment Income (NII) for high earners; The NII surcharge also applied to capital gains, increasing the max rate from 15% to 23.8%. States Levy Jock Taxes States and some cities have passed laws—known as Jock Tax laws—aimed at taxing the income of visiting team personnel. Taxes under these laws can be quite high, with rates in many states close to 10%. California’s 13.3% millionaire’s surtax is imposed on athletes under this law. Considering these tax rates, the state of residency determination is an important decision. Tax laws in a player’s home state, college state, and location of professional team factor into their decision of where to legally declare residency. Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming have no state tax. Residents of New Hampshire and Tennessee only pay tax on their dividend and interest income from investments. In addition to and distinct from US taxes levied at the federal and state level, cities and localities may levy and collect taxes. Each jurisdiction is autonomous from one another and from the federal government. Each administers its revenue collection efforts independent of other taxing entities. Laws regarding college income need to be understood, as well. Universities are required to report students’ financial information to the government. Scholarships, stipends, and summer employment all create tax-reportable income. If reported incorrectly, taxes could be levied on items that are not required to be taxed. A topic less spoken about involves improper benefits received by college prospects and athletes. Tax laws could be broken if income is received, but not reported. Internal Revenue Service Publication 525 states, “…income is taxable unless it is specifically exempted by law. Income that is taxable must be reported on your return and is subject to tax.” The consequences for under-reporting income can be severe. Complex Pro Filings Federal, state, city, and locality tax laws make tax filings complex and often complicated for any professional athlete, but especially one new in his or her career. For example, a National Basketball Association (NBA) rookie will be required to file tax returns for the US, state of residency, every state where his team played, and several cities. Keeping track of sports-related expenses might seem tedious, but it could potentially result in large tax deductions. The key is reporting those deductions on the correct tax return schedules to maximize their impact. Athletes who go overseas for their professional careers will need to consider the foreign tax laws of their team’s country. United States citizens working overseas are still required by law to file an income tax return. They are also legally required to report all foreign income and any foreign bank accounts to the US. In Summary Because of the complex tax laws, college athletes and new pros often discover the need for professional coaching on and off the field. Qualified Certified Public Accountants (CPAs) who are experienced with professional athletes’ taxes can help them during this exciting, but often costly, transition. An athlete with an injured knee would consult a sports orthopedist, not a general practitioner. In the same way, a professional athlete should consult a sports tax accountant who understands how to successfully navigate the Jock Tax environment. Too much is at stake. Dr. John Karaffa, CPA/PFS, CFP® is the founder and president of ProSport CPA PLLC, a Virginia-based accounting firm exclusively for professional athletes. Since his basketball-playing days at Butler University and professionally in Germany and New Zealand, Karaffa has amassed more than 25 years of extensive tax, accounting, and financial education experience. Karaffa earned his Doctor of Business Administration in 2010 and has taught university tax, accounting, and personal finance courses since 1999. Karaffa’s work has been featured nationally in Accounting Today, GQ, Fox News, and the Journal of Accountancy. He uses his tax preparation expertise and professional sports experience to coach, mentor, and educate clients to make good financial and life decisions.