When Spencer Torkelson was 19, his father, Rick, had a realization that later saved Torkelson three-quarters of a million dollars.

Undrafted out of high school, Torkelson matriculated to Arizona State and started torching college pitching, eventually crushing Barry Bonds’ school record for home runs by a freshman. “I was thinking, ‘Oh my God, this kid’s going to get drafted in the first round,”’ Rick recalled earlier this week.

The next time Rick filed his son’s taxes, the only income to report was from work on a Christmas tree farm. “Just a piddly little tax return,” Rick said. But because Torkelson was living year-round in Arizona, where his parents owned a condo, Rick filed his son’s return as a resident of Arizona instead of his home state, California. That distinction mattered immensely in 2020 when Torkelson landed a not-so-piddly $8.4 million signing bonus from the Detroit Tigers.

Because he had established Arizona residency, the difference in state tax rates saved Torkelson $760,000.

For Major League Baseball players, tax season is a complicated beast, and minor details can have major consequences. Torkelson’s parents are both certified tax professionals, running the family business, Torkelson & Associates, in Petaluma, Calif. Few players have that luxury. Instead, many find themselves mystified the first time their club mails them a teetering stack of W-2s in the offseason or they overhear older teammates talking about S Corps, LLCs and K-1s.

These days, it’s almost unheard of for an MLB player to do his own taxes.

“I think you’d be insane,” Cleveland Guardians outfielder Steven Kwan said. It’s not that he’s above it. It’s that he knows it’s incredibly complex. Like other pro athletes and entertainers, MLB players are taxed per day in most cities, states and countries where they perform. Each paycheck can spiral into a multi-state accounting nightmare.

“Taxes are an athlete’s biggest lifetime expense,” said Jacob Turner, a former MLB first-round pick and co-founder of Moment Private Wealth in St. Louis, “and one they often don’t think about.”

In 2015, then-Pittsburgh Pirates star Andrew McCutchen mistakenly left his pay stub in the visiting clubhouse at Wrigley Field. A photo of it was later posted to the internet. While fans were shocked to see a pay stub grossing $820,000 for the pay period, it was equally illuminating to see taxes and deductions swallowing 48 percent of the total. The list of states and municipalities taking a bite of McCutchen’s earnings ran too long to fit on the page — and it was only six weeks into the regular season.

“It’s no surprise what I make,” McCutchen said at the time. “It is a surprise, I’m sure, for people to see all those taxes that get taken out.”

It’s not just players getting taxed everywhere they play. That’s also the case for umpires and each club’s full-time traveling party, from the manager and coaching staff to the broadcasters and production crew.

Will Flemming, the Boston Red Sox’s radio play-by-play broadcaster for WEEI, said, “The Red Sox track it all for me, and I get 25 W-2s.” A road series in Tampa is a lot cheaper for Flemming than one in San Francisco, as Florida is one of nine states imposing no income tax, though the latter means time with his brother, San Francisco Giants broadcaster Dave Flemming.

Retired pitcher Ross Stripling is more financially savvy than most major leaguers; a finance major at Texas A&M, he became a licensed stock broker while in the minor leagues. But he only took basic accounting classes. So, Stripling had his dad’s accountant handle his tax returns until after his first MLB season, at which point the overwhelmed accountant suggested he find someone who specialized in athletes’ accounting.

“You need a CPA that’s specifically versed in an athlete’s problems,” Stripling said, “because I guarantee my dad’s guy in West Texas had never dealt with a Canadian tax return.”

Many players fail to fully consider taxes until well after receiving their first paychecks in the big leagues, where the minimum salary this season is $780,000. The MLBPA is not permitted to provide tax guidance to players — it can help with certain disputes and can attack “jock taxes,” as it did successfully last year in Pittsburgh, alongside the NFL and NHL players’ unions — but agents and financial advisors regularly refer players to tax professionals. Some agencies have in-house accountants.

Steven Piascik, a partner and athletes practice leader in CohnReznick’s Private Client Services, wrote in an email: “Even the most seasoned family accountant might not be prepared to handle 20 different state returns and foreign tax credits.” Because athletes don’t earn their income in one place, and because each place can tax a portion of their income, and because tax law can vary widely from one jurisdiction to the next, well, it’s not hard to see why Piascik and his colleagues are so busy this time of year.

The first step an accountant might take is to cast a critical eye upon the W-2.

“That’s big,” Stripling said. “Are your feet where the schedule says they are?”

Accountants create a duty-day schedule by having players precisely track their travel. If a player spends an off day at home versus a road city, or rehabs an injury in Florida instead of the club’s home stadium, or goes on a minor-league rehab assignment, the tax implications change. Often, accountants find that the team withheld too much money. Sometimes a player yo-yoing between the majors and minors, where pay is lower, will wind up in the wrong tax bracket.

Another key factor, as in Torkelson’s case, is residence state. A player employed by the Los Angeles Dodgers or San Diego Padres can’t avoid that more than half his salary will be subject to California’s high tax rate, but establishing residency in a low- or no-tax state can protect endorsement deals and other non-performance-related compensation.

“What you’re trying to avoid is having everything pulled into [a high tax state],” said Thomas Giordano-Lascari, partner in Greenberg Glusker’s Private Client Services Group.

There are numerous strategies athletes can deploy to spread out income and lower their lifetime tax bill. Stripling leaned into tax-efficient investments and maximized his retirement accounts. Some players set up an S Corp or LLC for endorsement income. Others form charitable foundations. Signing bonuses, deferrals and incentives all bring different tax considerations into play.

“You need a pretty good accounting team because it gets so complicated,” Giordano-Lascari said, adding that some players from outside the United States and Canada have additional tax obligations in their home country. “Each state and each country is its own unique animal.”

A tax professional can also keep tabs on the ever-changing minutiae of tax law. A decade ago, for example, MLB players could write off some costs as “unreimbursed employee business expenses.”

“That provision let athletes deduct things like agent fees (often 3 to 5 percent of a player’s contract), union dues, training and conditioning expenses, and travel costs for work purposes,” Piascik wrote. “In practice, an athlete with a big salary often did benefit from those write-offs.”

Then, Stripling said, “that went to a big goose egg.”

The 2017 Tax Cuts and Jobs Act suspended the deductions of those unreimbursed job expenses for W-2 employees. Some players front-loaded agent fees in their contracts to benefit from the deductions before the tax act was enacted. Afterward, players found themselves with mountains of receipts they no longer had any reason to save. Torkelson paid to have a home gym installed.

“I was like, ‘I can just write it off,’” he said. “It was like, nope.”

In 2012, before his second big-league season, reliever Jared Hughes sat in front of his computer, plopped a pile of W-2s on the table and opened his tax filing software. He’d started the previous season at Double-A Altoona, climbed to Triple-A Indianapolis and then gotten called up to join the Pirates. Every night for a week, Hughes sat there adding new states to his return, slogging his way through until he finally finished, becoming one of the few major leaguers to say he did his own taxes at least once.

“After that,” he later recalled, “I realized it was time to get an accountant.”

Now working as the Los Angeles Angels’ director of minor league pitching, Hughes hasn’t touched tax software in over a decade. “I’m not sure I’ll ever go back to TurboTax,” he said this week.

Tigers reliever Will Vest, a finance major at Stephen F. Austin, is always on his iPad poring over the financials of his two Texas-based LLCs. He keeps his own books.

“That’s almost like my escape,” Vest said. “Guys are like, ‘Why don’t you just get somebody to do that?’ I’m like, ‘I enjoy it.’” But filing his own taxes? Vest burst out laughing. He leaves that to the professionals.

Torkelson’s parents no longer file his returns, either. Not that they couldn’t do it, Torkelson said, but they’d want to do it for free, and he’d feel bad for burdening them with that complicated return on top of the 2,300 others that come across their desks. (This tickled his dad, who said it would only take about two hours.) Torkelson’s return is handled by a tax-preparation firm that’s partnered with his agency, Boras Corp, though he still sends a copy to his parents to review.

For any player still trying to DIY their taxes, and realizing they may be in over their head, Torkelson has a recommendation.

“Torkelson & Associates,” he said. “I can give you their business card.”

Maybe he can get a referral bonus from the folks who run the place.

— The Athletic’s Cody Stavenhagen, Chad Jennings and Zack Meisel contributed to this report.