How many NIL athletes remembered to file tax returns this year?

[Big_O]

Read an article regarding athletes participating in NIL compensation this year. Not all have realized that any such compensation is taxable, especially since this is the first year of officially sanctioned compensation. The compensation can take many forms such as cash, food, auto leases and all are taxable.

Not all schools are providing guidance and many athletes don’t have any advisors that inform them about the tax consequences. Some think the compensation is either non-taxable or have no idea that it is taxable. It will be interesting to see if any athletes are finding themselves in trouble with the IRS or state tax authorities sometime in the future.

 

[s1uggo72]

Read an article regarding athletes participating in NIL compensation this year. Not all have realized that any such compensation is taxable, especially since this is the first year of officially sanctioned compensation. The compensation can take many forms such as cash, food, auto leases and all are taxable.

Not all schools are providing guidance and many athletes don’t have any advisors that inform them about the tax consequences. Some think the compensation is either non-taxable or have no idea that it is taxable. It will be interesting to see if any athletes are finding themselves in trouble with the IRS or state tax authorities sometime in the future.

Or perhaps puts them over the limits for their Pell grants

 

[psuro]

Here is the 2021 Income Tax Brackett

2021 Tax Brackets

What are the 2021 tax brackets? Explore 2021 federal income tax brackets and federal income tax rates. Also: child tax credit and earned income tax credit

taxfoundation.org

Assuming they are single, they would start with a 10% income tax bracket, and then go up from there. In all honesty, I don't know if their NIL payments have federal and state taxes taken out, or even if their NIL value is on a per annum basis. But in all reality, it's gonna a small number for the majority of those that get NIL revenue.

 

[Woodpecker]

I'm sure that most of their accountants handle all that

 

[LionJim]

Hey, I’m sure this has been asked and answered, but are students allowed to hire agents to help them find the NIL gold mine?

 

[PSUFTG]

Hey, I’m sure this has been asked and answered, but are students allowed to hire agents to help them find the NIL gold mine?

Yes

 

[LionJim]

Yes

I would imagine that these agents would be forbidden to talk to the NFL, NBA, what have you until the player is ready to go pro.

 

[GrimReaper]

Read an article regarding athletes participating in NIL compensation this year. Not all have realized that any such compensation is taxable, especially since this is the first year of officially sanctioned compensation. The compensation can take many forms such as cash, food, auto leases and all are taxable.

Not all schools are providing guidance and many athletes don’t have any advisors that inform them about the tax consequences. Some think the compensation is either non-taxable or have no idea that it is taxable. It will be interesting to see if any athletes are finding themselves in trouble with the IRS or state tax authorities sometime in the future.

Since they have to file for the value of room, board, books, and cost of attendance stipend, I'm going to guess that most have.

 

[Nitt1300]

I would imagine that these agents would be forbidden to talk to the NFL, NBA, what have you until the player is ready to go pro.

I imagine nobody cares one bit about any rules that are in place

 

[LionJim]

I imagine nobody cares one bit about any rules that are in place

They’d be too hard to enforce anyway.

 

[s1uggo72]

They’d be too hard to enforce anyway.

not really, they have an app for all of this and the school monitors the app. while the player likes getting paid for NIL, the school does not want to give away their 'intellectual property' without getting their cut. Point is, you won't be seeing the WaWa player of the week from PSU with PSU getting a cut.

I went to a seminar at Marshall yesterday about this.. It was to the Wild West one would think it is. IMG/Learfield keeps a watchful eye as well.

 

[blion72]

Since they have to file for the value of room, board, books, and cost of attendance stipend, I'm going to guess that most have.

I think it is absolutely okay for players to have an agency rep, lawyers and accountants to take care of this. They are already getting a 1098 or 1099 from the school now, so taxes are not new. For some NIL company to pay the athlete for their NIL value/service, there would have to be a W9 filed by the player. You cannot just hand $$$ to a player from a real company (whether this is crowd fund like SWH or a direct company like an auto dealer). The company handing the $$$ can get into a legal mess if they tried to launder funds direct to a player. This can become criminal - remember when the Auburn QB investigation had the FBI involved it was talking RICO. That was before NIL and had nothing to do with NCAA rules and everything to do about money laundering and tax avoidance.

This involves feds, IRS and state authorities - nothing to do with the NCAA. Try and setup a company to launder $$$ and avoid taxes - you will be in serious trouble. If one of these players and one of these new companies try to do that, they are going to be in a world of hurt.

Actually, your net NIL value per $ is probably higher in Florida than California or New York. For the big $$$ guys the tax impacts will matter. Tom Brady talked about how his tax situation re his player income improved in going from Pats to TB.

 

[LionsMD]

Here is the 2021 Income Tax Brackett

2021 Tax Brackets

What are the 2021 tax brackets? Explore 2021 federal income tax brackets and federal income tax rates. Also: child tax credit and earned income tax credit

taxfoundation.org

Assuming they are single, they would start with a 10% income tax bracket, and then go up from there. In all honesty, I don't know if their NIL payments have federal and state taxes taken out, or even if their NIL value is on a per annum basis. But in all reality, it's gonna a small number for the majority of those that get NIL revenue.

The couple NIL agreements I have seen thus far have the athlete as an independent contractor (not an employee), so the athlete is 100% responsible for paying their own federal and state taxes.