Dodgers: How Yoshinobu Yamamoto saves $8.5 million with 2024 signing bonus

Dodgers starting pitcher Yoshinobu Yamamoto truly did come to the MLB at the right place at the right time.

The stars aligned for Yoshinobu Yamamoto amid his decision to make the trip stateside and start plying his trade in the MLB. After all, the Los Angeles Dodgers clearly earmarked their coffers for an incredible spending spree during the 2023-24 offseason. As a result, Yamamoto was able to sign a 12-year, $325 million deal with the Dodgers in free agency, with $50 million of that coming upfront as a signing bonus.

This contract structure for Yamamoto's deal doesn't necessarily benefit the Dodgers the way the deferrals in Shohei Ohtani's contract do. However, from Yamamoto's perspective, getting that much money upfront will save him a considerable sum thanks to the current taxation policies in effect.

According to Bob Nightengale of USA Today and Robert Raiola, CPA, Yoshinobu Yamamoto “will save about $7.2 million in California taxes and $1.3 million in federal income tax” once he receives his Dodgers signing bonus in 2024.

Raiola, who is known as the Sports Tax Man on Twitter (X), pointed out that Yamamoto, being a non-California resident, won't be subject to the heavy state tax. The tax rate in California is at 14.4 percent, which is where the $7.2 million figure comes from.

Nonetheless, the new Dodgers star pitcher will have to pay a hefty federal tax on his signing bonus. Nevertheless, due to former president Donald Trump's Tax Cuts and Jobs Act, the federal tax rate in 2024 will remain at a lower 37 percent; come 2025, that number will revert to 39.6 percent. Yamamoto, by virtue of receiving his signing bonus next year, will save $1.3 million as a result of these tax cuts.

$8.5 million is nothing to scoff at, especially for someone who will be receiving his first huge payday like Yoshinobu Yamamoto. Perhaps the exemption from paying the California state tax is something that made Yamamoto's decision to sign with the Dodgers that much easier.

Now, with Yamamoto receiving a considerable amount of money upfront, his contract will now amount to around $22.9 million per year. That remains a ridiculous amount, especially when the 25-year old hasn't pitched a single inning in the MLB. But the Dodgers clearly believe that he's well worth that exorbitant price.