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Leafs Sign Auston Matthews to 5 year $11.634 million Extension

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Article XVI of the US-Canada tax treaty states that signing bonuses paid to a resident of the US by a Canadian team are taxed at 15% in Canada, and vice versa for US teams paying bonuses to Canadian residents. Having his signing bonuses taxed at 15% in Canada ensures that Matthews would receive a full foreign tax credit on his US return for all taxes paid in Canada on both his signing bonus and his salary each season.


Matthews is a US tax resident, given he's born in California, and raised in Arizona. In order to enjoy his full tax savings, he would need to maintain his residency in the US but would need to move to a tax-free state, such as Florida or Texas. He's currently getting charged 4.54% in income tax in Arizona due to his earnings.

Edited by Morrison7

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20 minutes ago, Morrison7 said:

Article XVI of the US-Canada tax treaty states that signing bonuses paid to a resident of the US by a Canadian team are taxed at 15% in Canada, and vice versa for US teams paying bonuses to Canadian residents. Having his signing bonuses taxed at 15% in Canada ensures that Matthews would receive a full foreign tax credit on his US return for all taxes paid in Canada on both his signing bonus and his salary each season.


Matthews is a US tax resident, given he's born in California, and raised in Arizona. In order to enjoy his full tax savings, he would need to maintain his residency in the US but would need to move to a tax-free state, such as Florida or Texas. He's currently getting charged 4.54% in income tax in Arizona due to his earnings.

how in god's name does arizona charge only 4.54% income tax on 11.6mil a year?  i'll just assume the federal portion is the majority. 

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The salary cap has went up what 5 million since McDavid signed??  That doesn't give him the excuse to make more than McDavid, sry.. and McDavid only got that bc it was for 8 years. This contract was stupid, but I digress, what's done is done.

Just like the Nylander deal, which yes, was top dollar for a guy who can't go into a corner and win a puck battle. I could list you a ton of cheaper guys I'd rather have, but I'm less worried about that now as I'm pretty sure he's as good as gone this summer anyways.

 

Edited by nodoubtabouter

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5 hours ago, Pai Mei said:

how in god's name does arizona charge only 4.54% income tax on 11.6mil a year?  i'll just assume the federal portion is the majority. 

In Arizona, there’s five different tax brackets. Since Matthews makes more than $152,435 per year, he’d be within the group of individuals who pay 4.54% income tax.

If he made between 50,813 and $152,434 per year, he’d only pay 4.24% income tax. 

TLDR: Higher the income, the higher the percentage.

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5 hours ago, HBCYG said:

Get generational talent. 

Can't accept that the generational talent will get paid as one. 

 

 

36 minutes ago, TuckerIntensity said:

One of the best players in the game signs long term and proclaims he loves being a Leaf and it's all about winning championships, Leafs fans lose shit.

Mind blowing stuff.

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5 hours ago, nodoubtabouter said:

The salary cap has went up what 5 million since McDavid signed??  That doesn't give him the excuse to make more than McDavid, sry.. and McDavid only got that bc it was for 8 years. This contract was stupid, but I digress, what's done is done.

Just like the Nylander deal, which yes, was top dollar for a guy who can't go into a corner and win a puck battle. I could list you a ton of cheaper guys I'd rather have, but I'm less worried about that now as I'm pretty sure he's as good as gone this summer anyways.

 

Percentage to percentage puts him at $13.05mil for 8 years and everyone and their sister knows mcdavid left money on the table.

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48 minutes ago, Morrison7 said:

In Arizona, there’s five different tax brackets. Since Matthews makes more than $152,435 per year, he’d be within the group of individuals who pay 4.54% income tax.

If he made between 50,813 and $152,434 per year, he’d only pay 4.24% income tax. 

TLDR: Higher the income, the higher the percentage.

wow, that IS informative.

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22 hours ago, Matthews34 said:

I get Marleau is only making 1.5 million in salary but his cap hit is still 6 million which is a lot to take on for any contender for Marleaus production nowadays.

What about a 3 team deal?

Sharks get Marleau (2M cap hit)

Team A gets draft pick (and retains 2M of Marleaus salary)

Leafs retain 2M of Marleaus contract

 

That still frees up 4M in cap hit. Or instead of retaining, get a guy and buy him out, like Gagner in Vancouver. 1M for 2 seasons against the cap? So Canucks get a pick for really just retaining 2M in salary, Leafs clear 5M in cap next season (and only have to give up a pick and retain 1M extra in 20/21), and Sharks get Marleau for only 2M for a final season there.

 

4 hours ago, Nipzie said:

@majingirrealhockeyinsider Auston Matthews requests trade because we can't have nice things 

 

Maj is really moving up in the world. 

I'm the one saying Matthews contract is a good one.

Edited by majingir

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26 minutes ago, majingir said:

What about a 3 team deal?

Sharks get Marleau (2M cap hit)

Team A gets draft pick (and retains 2M of Marleaus salary)

Leafs retain 2M of Marleaus contract

 

That still frees up 4M in cap hit. Or instead of retaining, get a guy and buy him out, like Gagner in Vancouver. 1M for 2 seasons against the cap? So Canucks get a pick for really just retaining 2M in salary, Leafs clear 5M in cap next season (and only have to give up a pick and retain 1M extra in 20/21), and Sharks get Marleau for only 2M for a final season there.

 

I'm the one saying Matthews contract is a good one.

Can multiple teams retain on the same player? As much as I'd like Marleau's contract to be gone, I think he's still here for another year lol.

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56 minutes ago, Matthews34 said:

Can multiple teams retain on the same player? As much as I'd like Marleau's contract to be gone, I think he's still here for another year lol.

https://www.capfriendly.com/faq#retained

Quote

Players’ contracts are limited to 2 retained salary transactions per contract.

So it'd work out for Leafs and a 3rd party to retain salary. Though the buyout option of another teams player (like the Gagner deal I mentioned) could also work.

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2 hours ago, Mantis Toboggan said:

Prove it 

There was a trade, pretty sure it involved Pittsburgh, that got denied by the league because of this. I want to say it was a brassard deal before the one that actually sent him to Pittsburgh. But I’m on vacation and it’s my birthday and if you care that much look it up yourself you prick.

1 hour ago, brocto said:

So you add a 7th round pick in 2028.. 

That doesn’t fix the problem bruh. 

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