By Dr. Tamara Patzer
In brief: In entertainment, income can leap in one year and fall back the next. A New Orleans tax attorney lays out the questions to ask before a big payday, using the IRS thresholds that change with income, the national top 1% line, and state estimates for California and Louisiana.
Entertainment careers are often described by their peaks: the breakout role, the hit record, the contract that changes everything. The planning problem hides in the peak. Income that doubles in one year does not come with a matching increase in the time or the advice available to handle it. Todd M. Villarrubia, a New Orleans attorney who focuses on tax and estate planning, wrote Entrepreneurial B.E.A.S.T. Mode™ for people whose earnings have outrun their structure. His central warning applies directly to a big year: the work has to be done before the money arrives.
What Actually Changes In A Big Year?
Several thresholds, and mostly without notice. The IRS says the 3.8 percent Net Investment Income Tax applies when modified adjusted gross income exceeds $200,000 for a single filer, $250,000 for joint filers, and $125,000 for married people filing separately.² A person with a steady income may never think about those lines. A person whose earnings spike will cross them in a single quarter.
The Tax Foundation’s analysis of IRS data for tax year 2023 found that a filer needed about $676,000 of adjusted gross income to reach the top 1% nationally. By state, the picture varies: SmartAsset’s 2026 estimates, which project IRS data forward and count filers and not households, put the California threshold at $987,325 and Louisiana’s at $593,101. A performer who lives in one state and works in another has a more complicated picture than either number suggests.
Why Does The Planning Have To Come First?
Because the options narrow after the income is earned. A structure set up in January can shape how a December payment is held and taxed. A structure set up in January of the following year cannot. The book puts the idea in a line about estate planning: “Estate planning is more than just creating documents; it’s about strategically structuring ownership before opportunities arise.”
That sentence is about estates, but the reasoning is general. An offer on the table is not the moment to start asking who should own what. By then the advisers are working against a deadline, and the buyer, the studio or the label is waiting.
What Are The Questions To Settle First?
Six cover the ground.
- Who is the contracting party: the individual, or a company set up for the work?
- How is that company classified for tax, and does the classification still fit?
- Which of the expected payments are one-time and which will recur?
- What thresholds might this year’s total cross, federally and in each state where work is done?
- Who is on the team, and have they spoken to one another?
- What is the money for: spending, saving, investing, giving, or all four?
The last question is often the hardest and the most useful. Wealth without a purpose is easy to spend and hard to protect.
What Does The Book Say About Engineering The Outcome?
Villarrubia describes a shift from reacting to events to shaping them. In his words, “You’re no longer reacting to risk; instead, you’re engineering your legacy.” For a performer, writer, or producer with a good year, that means choosing a structure and a team on purpose, and not letting the contract decide them by default.
He also warns about the cost of leaving things to chance. “Here’s the truth few want to admit: without a clear succession or exit plan, that wealth can disappear faster than it was built.” Entertainment is a field where income can end as abruptly as it began. A plan that assumes the peak will last is a plan that has not been tested.
How Much Is Enough?
There is no number. Schwab’s 2025 Modern Wealth Survey, which asked 2,000 adults, found that respondents put the cost of being wealthy at an average of $2.3 million and the cost of being financially comfortable at $839,000.⁴ The figures are opinions and not benchmarks, and they remind the reader that people define enough differently. A performer in a big year should write down their own definition, since it will shape every other decision.
Where Do Big-Year Decisions Usually Go Wrong?
Rarely in the contract itself. They go wrong in the weeks after. A large payment sits in a personal account. A new expense becomes permanent. A relative or friend is promised help without terms. A tax estimate is made on last year’s income. Each is easy to prevent with a short conversation held beforehand.
Another trap is concentration. A career that pays well in one field and one place invites the assumption that it will continue. The book’s line is worth keeping in view: “Concentration without protection is not strength; it’s exposure.” A big year is the best time to ask what the person would do if next year were quiet.
What Should The Team Do Together?
Meet before the money moves. The attorney, the tax professional, the financial adviser, and the business manager, if there is one, should hear the same facts at the same time. The book describes the cost of advisers who work in isolation: “The estate attorney drafts documents but doesn’t coordinate with the tax strategy.” The remedy is not a better document. It is a meeting.
The agenda can be short: the expected income and its timing, the entity that will receive it, the tax picture by state, the plan for the money and the plan for the family. Ask each adviser what they need from the others.
Common Questions
Is a big year always a reason to restructure?
No. Sometimes the right decision is to change nothing. The point is to decide on purpose, with advice.
Do I need to know the national income line?
Not as a target. It is a reference point that shows how unusual a very high income year is.
What if the money has already arrived?
Then the useful step is to bring in advisers now. Some choices remain, even late in the year.
Sources
- Tax Foundation, Who Pays Federal Income Taxes? Tax Year 2023
- Internal Revenue Service, Topic no. 559, Net Investment Income Tax
- SmartAsset, Income Needed to Be in the Top 1% in Every State (2026)
- Charles Schwab, 2025 Modern Wealth Survey (Business Wire)
About the author. Dr. Tamara Patzer is a publisher and former newspaper editor. She was on the staff of The Charlotte Sun when it was named a 2005 Pulitzer Prize finalist for its Hurricane Charley coverage.
About the source. Todd M. Villarrubia is an attorney with an LL.M. in Taxation and a Juris Doctorate. He is an Accredited Estate Planner, a Board Certified Expert in Estate Planning and Administration, and a Fiduciary Investment Advisor Representative. He is the author of Entrepreneurial B.E.A.S.T. Mode™.
Wealth Planning Law Group
101 W. Robert E. Lee Blvd., Ste 404, New Orleans, LA 70124
Phone: 504-982-8207 | Email: todd@lawealthplan.com
Website: Wealth Planning Law Group
Disclaimer: Attorney advertising. Sponsored feature written on behalf of Todd M. Villarrubia. This article is general information, not legal or tax advice, and reading it does not create an attorney-client relationship. Results vary.
