Jonathan Mariner spent 23 years working in professional sports. For 13 of those years, he served as the executive vice president and CFO of Major League Baseball.
In May 2016, he left his high six-figure position to launch TaxDay, an app that tracks the time you spend working or living in different states so you can accurately report your residency when you file your taxes and avoid expensive consequences.
A Harvard Business School graduate, Mariner has always had "this strong interest in entrepreneurship," he tells CNBC. "That's one of the things that triggered me to take the plunge and leave MLB."
Mariner's app — which targets people who juggle multi-state residency or do business in various states — would solve a problem that he has dealt with personally several times.
"The app is the reflection of that old saying, 'Necessity is the mother of invention,'" says Mariner, who started traveling frequently from his home in Fort Lauderdale, FL, to New York City when MLB hired him.
"I had the vague notion in my mind that if you spent less than 183 days in New York, they couldn't make you a full-time resident," he says. "What I didn't understand was all the rules and exceptions about how that works."
His misunderstanding led to several letters from the IRS, Mariner says: "I thought myself to truly be a Florida resident — I never changed my voter registration or driver's license. Fast forward to around 2008, I get a notice from New York state saying they want to audit my 2005, '06, and '07 tax returns, questioning my partial residency filing status. "
Two years later, it happened again, and Mariner received "a nice little love note saying they want to audit 2008 and 2009. "
He discovered that each U.S. state has different rules and regulations that define tax residency.
For example, if you fly from Florida to New York on a Monday night, have meetings all day Tuesday, and fly back to Florida on Wednesday morning, that counts as three days spent in New York, Mariner explains. "In your mind, you're thinking, 'I was in New York for one business day.' In reality, that's three days, because any portion of a day counts."
The app, which Mariner started developing in May 2015, factors in the complete set of tax rules for all 50 states, so you're always sure of how many days you've spent in each tax jurisdiction.
If you travel a lot, it's challenging to keep track of your days spent on the road. Mariner says, "I'm looking at my calendar at the end of the year, circling and counting up days, and I thought, there's got to be an app out there to do this for you. Nothing was out there, so I decided to build it myself."
TaxDay, which was released in April 2016, offers a free 90-day trial. After that, the app costs $9.99 a month.
The app uses your phone's GPS to track time you spend in various states. But concerns about privacy and security shouldn't stop potential users. "Given the way the tax laws work, we only need to track the state you're in," he says. "We're not tracking which street corner you're on."
As you can see below, the app provides a summary of your travel in each jurisdiction. It also alerts you when you're approaching a residency threshold that could trigger a change in your tax filing.
The MLB CFO-turned-entrepreneur also has a few tips for aspiring entrepreneurs. His advice might go down more easily than the controversial suggestions offered recently by the Atlanta Braves' GM, who told young people to pursue internships and "don't worry about money."
If you're a recent grad, "it doesn't hurt to take that full-time job," Mariner says. "Spend time building your brand and actually learning to be good at something."
And if you're on the fence about taking the plunge into the entrepreneurial world, "Don't wait. Do it," he says. "I haven't met an entrepreneur yet who's said, 'Oh my gosh. Why did I do this?' I would tell any aspiring entrepreneur, and it sounds cliched, but just do it. "