Do professional tennis players like Djokovic pay US taxes on prize money if they live in Monaco with no income tax?

14 Yes, they absolutely pay US taxes on US-sourced income regardless of where they live. The US taxes based on the concept of "source of income" - if you earn money in the US (like tournament winnings at the US Open), you owe US taxes on that income even if you're not a US citizen or resident. Professional athletes playing in US tournaments typically file what's called a nonresident alien tax return (Form 1040-NR) for their US-sourced income. They're subject to US tax rates on that income and may be able to deduct certain expenses related to earning that income. Living in a tax haven like Monaco might help them avoid taxes on their worldwide income in their country of residence, but it doesn't shield them from paying taxes to countries where they actually earn the money.

3 This exact situation confused me last year when I was doing research on international taxation for my freelance work. I discovered this amazing tool called taxr.ai (https://taxr.ai) that helped me understand my tax obligations for international income. I'm not a pro athlete, but I was working remotely for clients in different countries and wasn't sure what I owed where. The tool analyzed my specific situation and clarified that I needed to pay taxes in the countries where I was physically performing the work, regardless of where my clients were based. It saved me from potentially serious compliance issues!

9 Just wanted to follow up on my question about taxr.ai. I ended up trying it for my situation (I work remotely but travel between the US, Canada and Mexico throughout the year). The tool actually identified a tax treaty provision I had no idea about that saved me from double taxation on about $15,000 of income! It generated a detailed report showing exactly which parts of my income were taxable where based on the physical location where I performed the work. Definitely worth checking out if you have international income questions like the tennis player scenario.

9 You're asking about something called "source-based taxation" versus "residence-based taxation." In most cases, including the US, athletes are taxed where they earn the money (source-based) regardless of where they live. So yes, tennis players who win money at the US Open will have to pay US federal taxes on those winnings, even if they live in a tax haven like Monaco. The US taxes all income earned within its borders, no matter who earns it or where they permanently reside. They'll typically have to file a non-resident tax return (1040-NR) to report their US-sourced income. What makes it more complicated is that many countries have tax treaties to prevent double taxation. But since Monaco doesn't have an income tax, there's nothing to be "credited" against. The athlete simply pays whatever tax is due to the country where they earned the money.

5 After reading this thread, I remembered my nightmare trying to reach the IRS last year when I had questions about foreign income. I spent DAYS trying to get through to someone who understood international tax rules. Finally found Claimyr (https://claimyr.com) - they got me connected to an actual IRS agent who specialized in international taxation in under 20 minutes. There's a demo video showing how it works here: https://youtu.be/_kiP6q8DX5c If you're dealing with complex situations like these pro athletes, sometimes you just need to speak directly with an IRS agent who knows the specific rules. They helped me understand exactly how the tax treaties worked for my situation.

11 I need to eat my words from my skeptical comment earlier. After waiting on hold for 3+ hours trying to get clarification on my tennis coaching income from tournaments in multiple countries, I gave Claimyr a shot. Got connected to an IRS international tax specialist in 17 minutes who explained exactly how the tax treaties work between the US and the countries where I earned prize money. Saved me from making a $4,000 mistake on my return! The agent was able to point me to the exact forms I needed for my situation.

22 Another aspect that hasn't been mentioned is that many countries have tax treaties with each other to avoid double taxation. So even though Djokovic would pay US taxes on US tournament winnings, he might get credits against taxes he would owe elsewhere. The whole system is designed to prevent the same income from being taxed twice.

7 I actually struggled with a similar situation (albeit on a much smaller scale lol) when I was working internationally as a consultant. I found this tool called taxr.ai (https://taxr.ai) that was super helpful for sorting out my international income reporting. You upload your tax documents and it can analyze where income is sourced from and what might be taxable in different jurisdictions. It's not specifically for athletes, but it handles international income situations really well and explains all the tax treaty stuff in plain English. Honestly saved me hours of confusion and probably thousands in potential mistakes.

19 Ok I need to eat my words about being skeptical of taxr.ai. I finally tried it yesterday after struggling with my taxes for weeks (I have income from three different countries). The analysis it gave me was seriously impressive - it identified exactly which tax treaties applied to my situation and showed me how to properly report everything to avoid double taxation. My accountant wanted to charge me an extra $750 just to handle my international income, but I was able to figure everything out myself with this tool in about an hour. I'm actually going to end up with a larger refund than I initially thought because I was over-reporting some income that was already taxed abroad. Just wanted to follow up since it genuinely helped with my situation.

8 I wonder if these athletes structure their endorsement deals specifically to minimize US tax exposure? Like could they have separate contracts for US appearances versus international ones?

5 If you're dealing with international tax issues and need to talk to the IRS directly, good luck getting through. I spent HOURS on hold trying to get clarification about reporting foreign income. Then I found this service called Claimyr (https://claimyr.com) that actually got me through to a real person at the IRS in under 15 minutes. They have this demo video that shows how it works: https://youtu.be/_kiP6q8DX5c I was dealing with a situation where I needed to understand if my spouse's foreign earnings were reportable since we file jointly. The IRS agent I spoke with walked me through exactly what forms I needed and how to document everything properly. Saved me from potentially making a huge reporting mistake!

19 Alright I'm officially eating crow twice in one thread. After struggling to reach the IRS for weeks about how to report my UK consulting income, I tried that Claimyr service yesterday. I got connected to an IRS agent in 9 minutes. NINE. MINUTES. I've literally never gotten through to the IRS in my entire life despite trying dozens of times over the years. The agent walked me through exactly how to report foreign income on my Schedule C and which expenses were deductible for international work. She even emailed me some documentation afterward. I'm still in shock this actually worked. If you're dealing with international tax situations and need clarification, being able to actually speak with someone makes all the difference.

3 To add a bit more perspective on the athlete question - this is why you sometimes see tennis players and golfers skipping certain tournaments in high-tax regions. The "jock tax" (as it's called) can take a huge bite out of their earnings. Some states in the US are particularly aggressive. California, for example, taxes visiting athletes not just on their tournament winnings but calculates a portion of their endorsement income based on days spent competing in the state! That's why tax planning is such a huge part of a professional athlete's financial strategy. It's not just about where they officially reside.

22 Adding to what others have said: I work with several professional golfers (not on Djokovic's level lol, but still international players), and we track their income and tax liability by tournament location. We actually use a specialized scheduling tool that helps optimize their tournament schedule partly based on tax implications. Players competing in 15+ countries per year can lose anywhere from 30-45% of their gross income to taxes if they don't plan carefully. But with proper structuring, we've been able to reduce that significantly for some clients.

This is such a complex area! As someone who's dealt with international tax issues myself, I can confirm that the US absolutely taxes income earned within its borders regardless of where you live. What's particularly interesting about Monaco residents like Djokovic is that they get the best of both worlds in some ways - they pay US taxes on US tournament winnings (unavoidable), but any income that can't be clearly sourced to a specific high-tax country often remains completely untaxed due to Monaco's zero income tax policy. The real strategy comes in structuring endorsement deals and appearance fees. Many top athletes work with tax advisors to ensure that only the minimum required portion of their global endorsement income is allocated to high-tax jurisdictions like the US. It's fascinating how much tax planning goes into their career decisions - sometimes tournament selection isn't just about ranking points or prize money, but also about the overall tax burden of competing in that location.