Jonathan Kuminga turned down considerably extra money from the Lakers to hitch the Timberwolves, however his resolution got here with one main monetary benefit.
Kuminga agreed to a two-year, $12.4 million contract with Minnesota on Wednesday. Los Angeles was ready to supply him a sign-and-trade deal value no less than $12 million yearly over greater than three years, in keeping with ESPN’s Shams Charania.
The distinction between the gives was already substantial, however Kuminga’s potential tax invoice in California made the numbers much more fascinating.
On a $12 million annual wage with the Lakers, Kuminga might have paid roughly $6.4 million per 12 months in taxes, in keeping with figures from California’s Franchise Tax Board.
His tax burden in Minnesota is projected to be nearer to $3 million yearly, in keeping with the Tax Basis.
Meaning Kuminga might save roughly $3.4 million per 12 months in taxes by taking part in for the Timberwolves as an alternative of the Lakers.
Nonetheless, the tax financial savings don’t fully make up for the cash he left behind.
Even after accounting for California taxes, Kuminga might have taken dwelling roughly $5.6 million yearly below the proposed Lakers contract. His estimated take-home wage with Minnesota is round $3.2 million.
In different phrases, Kuminga sacrificed roughly $2.4 million in annual after-tax revenue by selecting Minnesota.
The numbers make it clear that maximizing his earnings wasn’t the one consideration behind the 23-year-old’s resolution.
Kuminga is predicted to have a major alternative with the Timberwolves, whereas a transfer to Los Angeles would have positioned him alongside one other star-studded roster.
California’s taxes additionally aren’t precisely unfamiliar territory for Kuminga. He spent greater than 5 seasons with the Warriors earlier than finally leaving Golden State and touchdown with Atlanta.
Now he’s headed to Minnesota on a a lot smaller contract than what was accessible elsewhere.
Kuminga might have averted an enormous California tax invoice, however he additionally willingly walked away from hundreds of thousands of {dollars} in assured incomes potential to decide on the Timberwolves.
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