In this day and age of NIL I wonder if the players understand their tax bill that is coming due for 2024. Kids are not used to thinking about such things and I wonder if agents/Moms/Dads/etc are of any help ?
Go Coogs !
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I am sure it is but it is more of a scheme to circumvent paying payroll taxes. They are not getting paid for their advertising abilities, they are getting paid to play football. They are employees.
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They aren’t kids. They are adults maki g adult decisions and adult money. These aren’t 12 year olds wondering how to pay for a lunch. These are 18-22 year olds with 10 grand worth of jewelry on during games. We also have an NIL department that I am sure does their taxes like tutors do their work.
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What?
Most of us started working at age 15/16 so paying taxes shouldn’t be something new to 18-22 year olds
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Good point if they are employees then they must be subject to withholdings, et al. Will they get a 1040 form? I can see guys comparing 1040s in the locker room to determine top earners. NIL has created a really weird paradigm for college football !
Go Coogs !
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They aren’t employees…they are Independent contractors which actually makes their tax return more complex.
The taxes aren’t witheld as with a normal W2 employer-employee situation
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I would think NIL would be self employment income so the onus will be on the players to properly report and pay income taxes. IMO, the messy part is the leased cars and other non cash that players and families get would also be considered income. Also, many states have taxes and where you are from probably comes into play.
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To me they are employees. They are not allowed to do work for any other football team.
For the donation bucket of NIL, they are just taking Generational Wealth money from families, transferring them to college athletes (most from lower income familes) and then OF COURSE the government is going to get a piece of this wealth transfer.
Of course, the government appproved this Ponzi Scheme!
I don’t think they would be considered employees. That’s kinda a part of the ruse of NIL. They are contracting with the collectives or businesses directly and can sign many individual deals with different entities so would be 1099 in most cases. They scholly is what’s committing them to one school.
With all that said, players with substantial NIL would be smart keep receipts and such to help reduce taxes owed. I would be shocked if many are. I’d bet many aren’t doing anything
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I think the IRS will step in and rule on it.
The NIL, like the under the table payments before it were to provide a substitute for salary. But everyone knew and knows that money is to compensate players to play a sport.
My only question is what to the payers of the NIL money get from it now that it is above the table. Before the cash payments were a form of money laundering. You understood why people were doing back in the dark money days. But now what do you get for paying $3.0 million to get a QB that might not pan out and can leave in a year?
They also are subject to SS taxes and they are deemed to be self employed that is about 15%.
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Always figured tax problems would be inevitable.
Interesting topic. The players should receive a form 1099 and are responsible for paying their own taxes. Assuming someone is helping them with that.
As far as the “payers” go. It’s not a charitable write-off. Perhaps they can write it off as Advertising/Promotion if they are a business.
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Until the schools are able to pay them directly, they are not employees. They are independent contractors to the organization that is paying them. There is no withholding for taxes or Social Security. They will receive a 1099 and be expected to pay all of the associated taxes.
There are no “tax problems.”
They just need to have a good tax preparer. Depending on how the NIL deal is structured, they will recieve a 1099 (since at the moment they are not employees but more like independent contractors). They just need to give that to their accountant.
If they have H&R Block or Turbo Tax, it can handle it with ease.
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NIL = tips
I get that. But the system is set up to circumvent payroll taxes and to sidestep the hiring and firing rules that are mandated at every public institution.
It is a scam.
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and BOTH Trump and Harris are proposing no tax on tips
interesting angle/twist
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