I hope that part of the U of A program for the NIL is teach the kids about income taxes and to be ready when the IRS starts getting involved…for most I would think it would not be much of a problem but if some of these young men and women start getting $50k a year in endorsements it could become an issue for them if they are not prepped about it.
I had expressed this concern the other day. Watch out now for Swine to tell us, again, how stupid this thought process is.
He may be right in that a player’s entourage from here out will require handler/agents and tax advisers.
They are doing that. One of the first things they addressed several months back when it was clear there was great potential this would be the result.
I’m pretty sure they will not be treated as w-2 employees where their taxes would be withheld, so they most likely will be independent contractors. If that is the case they will be required to file quarterly returns for all taxes such as state income taxes, FICA, FUTA, etc. And if they hire an accountant, they will have to pay them as well.
Fred, if Terry Prentice is not making that abundantly clear to our athletes, he should be fired yesterday. And going back to the point I made the other day, our athletes are not that stupid.
I believe irunalot is correct. They would be/are independent contractors and thus get 1099 forms . Again, Terry should be guiding them through that process.
And to Clay’s point, which was factual–not opinion from a very tall soapbox (which sometimes requires a stepladder), Terry Prentice, et al, began instructions on this long ago. That was my hope and resolved my fear and perhaps jh979’s too.
Lots of things to iron out, many of which will probably only surface as time goes by. I would guess that kids in high school will begin hiring agents, which means that the definition of when one becomes a pro will have to be clarified. Also, either the universities will have to hire accountants or the athletes will probably have to hire their own because (nothing stupid about it) are not that clear for athletes of that age (right out of high school) or even for me at my advanced age.
You are late to the dance. High schoolers have had “handlers” for many years.
Baseball payers on UA team have had “a handler” who eventually become their agents for decades. They must because they are negotiating contracts as high schoolers before the draft.
NCAA allows advisors or “handlers” if you are not “signed” and so it’s not a problem.
I think most AAU hoops stars are being “advised” as well.
Since when has society become this concerned about 18 year olds having to pay taxes?
High school graduates (and drop outs for that matter) that have entered the work force instead of going to college have been paying taxes for decades. Heck college students that work have been doing it.
We seem to have pretty low expectations for these kids. These athletes will figure it out.
Well, in the case of most high school and college students paying taxes, they are employees and have the taxes withheld from their income, and all they have to do is file an annual tax return, and usually get a refund. In the case of NIL, these students are independent contractors running a business and have quarterly filing requirements of all the various taxes…much more complex. Not saying they aren’t capable of doing it, especially if they are a business student or something, but most likely they will need to hire a CPA.
Good point irun. I know many adults who make 1099 income and even though their tax advisors tell them to stick to their estimated payment schedule (something like paying 25% to Fed and 6% to Arkansas every quarter) many of them do not. There is always an excuse - I’ll catch up next quarter or well I bought a new car last month so I’ll double up at the end of the year. The catch up usually doesn’t happen and they roll into April owing 5 digit figures to the IRS and 4 digits to the state. Keep in mind they will owe social security taxes on this income which adds another 15%.
These guys understand social media income better than 90% of this board. All you guys using a desktop and keyboard right now should probably pipe down.
College kids are amazing. Everyone I hire impresses me with their business knowledge - Something it took me getting into my 30s to understand. Not anymore.
They’ll be fine.
Whoa huntin, I’m a CPA and see what happens in real life every year. I’ve known many Business Professionals that don’t handle their personal finances correctly and have a large tax liability in the Spring. I hope every one of these kids go by the book and handle their taxes correctly, but business knowledge does not translate to staying up to date on your tax liabilities.
Snout, do you think the athletic department will set up a financial advisor for the student athletes similar to an academic advisor?
Now we have someone saying “pipe down?” Yikes.
My firm has spoken with HY and others involved and they seem to have this area covered. We reached out some time ago to offer our assistance in helping in whatever way we could. They felt comfortable that they were set with what they were doing internally.
I would think they would have assistance but I’m not sure the school would want to cross the line of providing financial advice. They may have a set-up to provide basic information and then have a referral system to outside professionals. Just a guess.
Yes, it’s a common problem. Nothing specific to college kids or NIL, just life. If the point is these kids are entering the real world, I guess we should talk about the non-athlete students that just graduated and are starting their own business, right?
almost as scary as comparing the NIL to a dam breaking… YIKES!