A New Boon For College Athletes Could Lead To Big League Tax Issues
Late last month it was announced that The National Collegiate Athletic Association began allowing university athletes to earn money from their name, image and likeness (NIL). That’s a coup for the college athletes, but, let me clue you in, it could be a double-edged sword when they find themselves owing taxes for the first time in their lives. It’s not surprising that most college athletes are not experienced at paying taxes. Unless they’ve had jobs they may never have received a 1099 form. If any of these athletes start getting lucrative endorsement deals, they’ll need professional tax help.
In fact, if your college kid is an athlete who is likely to benefit from the new ruling, you may want to find a good tax attorney to work with before the upcoming tax season. If the endorsements they get are significant, you can count on there being tax complexities.
For instance, they will have to start keeping track of certain expenses. Say, if they have to travel to different events or something of that nature where it’s on their dime, or they’re using Uber or their personal vehicles or taxi cabs, those would be some expenses that they’ll be able to deduct. But most of them won’t even realize that. Your tax attorney will help you become aware of these and other expenses to track as well as other complexities to become aware of, such as self-employment taxes.
The most important thing to remember is that you don’t want your college kid to end up in hot water with the IRS. If you or your college athlete needs tax help, give us a call. We’ll help avoid trouble with the IRS, which will be great for your kid’s future. In fact, if they make it to the professional level in their sport, they’ll be tax savvy!