Self-employed have to prepare schedules C and SE, which then feed into the Form 1040.
All these athletes probably need a CPA to handle this. Yes, they must make quarterly estimated tax payments.
Thereās no way this would pass given the light of day of vote by the people. These little states could pass it on a because they only know a couple of schools. You wonāt get the chance me thinks.
Tuition, fees and books would be scholarships - not taxable.
room and board would be taxable.
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Really curious how they word this so people such as musicians canāt claim appearances as non-taxable. Do they just need to be taking a class at a local CC to qualify or does it specify only specific students playing certain sports for the two main universitiesā¦
Not for NIL.
No, they were not in the past, but I havenāt considered if it changes with the revenue share or if the IRS has taken a position on it. I may do some research later.
Iām sure that would come up in discussion, and probably help trigger lawsuits over it. But really, they do it with regulations. Like the āNo Tax on Tipsā, the regulations specify who is eligible and who is not.
Yep, that is why I am curious how they write it. The no tax on tips is still fairly broad in who qualifies. I donāt think they specify that only workers at Chiliās and Twin Peaks are eligible. Just that they fall under a certain category of those who make a certain percentage from tips. I think it would also qualify for tips to a piano player in a bar as much as to the wait staff.
Would that mean that students (full time only or part time too) earning name income qualify (maybe the student is irrelevant and must be an athlete?) or do they get specific and say only those on athletic scholarships at the University of Mississippi and Mississippi State qualify.
Income is income, wherever it is earned.
From the IRS:
Employees and self-employed individuals may deduct qualified tips received in certain qualified occupations, such as wait staff, bartenders, salon workers, personal trainers, gig economy workers, and many more who customarily and regularly receive tips might qualify.
Right now there are proposed regulations published. No idea when final regulations would be published as that may take several years.
Valid question, though I canāt imagine thereās a big contingent of students earning name incomeā¦ though I guess it could be argued any students who are earning income as influencers could. I would expect that they would narrow it, who knows though.
More thinking the reverse.
What about influencers, performers or others similar category jobs doing well that decide to start taking a class towards a degree to become eligible for the no tax clause.
I wouldnāt say its reverse really. I didnāt mean the student had to become an influencer while a student, just anyone who is both an influencer and a student could make that argument. I could see someone using that as a potential strategy to avoid some state tax but I canāt imagine many people would want to pay tuition, go to class, do homework, etc. just to try and get a tax break. Would it be worth their time?
Of course it is also possible that this potential law could have income phase outs. So if youāre Star Quaterback #1 and getting $1 Million, you would be taxed. If youāre a walkon basketball player and get $10,000 then its tax free.
All goes back to curious about the wording. So many possibilities for it to work out fair or be really abused in many different perspectivesā¦