The new era of name, image, and likeness (NIL) deals has turned many college athletes into small business owners, and the tax obligations often catch them off guard. Most NIL arrangements classify athletes as independent contractors rather than employees, so they receive a Form 1099 with no tax withheld, a shift that many young adults do not expect.
“The IRS considers them a business owner, and they’re going to be filing a Schedule C on their tax return and reporting business income,” Jennifer Blackwood, managing principal of tax at PYA, told Checkpoint.
Athletes who have “probably never even paid tax,” she noted, are suddenly responsible for complex filings, including self-employment tax — an outcome that can be “a big surprise” as more players become subject to income tax.
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