![]() ![]() These 1099s flag to you how much you’ve been compensated. For this year, the IRS is planning for a $5,000 threshold to trigger the form. Suppose you’ve been paid via Venmo or PayPal. His job includes tax work for league-based and non league-based professional athletes. That’s where the education process is going to start,” said Ryan Losi, executive vice president of the accounting firm Piascik. ![]() The tax-time schooling of college athletes will be “greatly enhanced when they get a nice 1099-NEC in their mail. The payment threshold that prompts this tax form is payment worth at least $600, Raiola noted. The NEC stands for Nonemployee Compensation. Paid to endorse clothing, make a promotional appearance or something else? Expect a 1099-NEC. Paid by a memorabilia collector for your autograph? Expect a 1099-NEC. The compensation to independent contractors is documented in 1099 forms, he said. In the eyes of the taxman, student-athletes getting money in NIL deals are independent contractors and not employees, said Raiola, co-author of the book “Winning Tax Strategies for Athletes & Entertainers.” Here are some highlights: A number to watch: 1099 That’s when the IRS starts accepting and processing 2023 income tax returns. Rule number one from the IRS resource: “Any income from NIL activities, including non-cash, is considered taxable income.” The IRS’ ombudsman, the Taxpayer Advocate Service, set up an online resource last year to help athletes and their families understand the tax obligation with NIL deals. Until he explains, it’s common they don’t know taxes will apply, Raiola said. He’s helped college athletes with NIL deals. “One of the biggest areas that I don’t think is talked about is taxation,” said Robert Raiola, a director at the Sports and Entertainment Group within PKF O’Connor Davies Advisory. What’s received less attention are the taxes inhabiting this brave new world of college sports. Some speculate it’s one reason why University of Alabama coach Nick Saban recently shocked the college football world by retiring with six years and $71.8 million still to go on his contract. There has been a lot of attention on the implications of NIL deals ever since. The NCAA made the change following a landmark Supreme Court decision in 2021. That could mean marketing deals, product endorsements, promotional appearances, and much more. It’s been less than three years since the National Collegiate Athletic Association said student-athletes could be compensated for the use of their name, image and likeness. Young athletes know the acronyms tied to their sport: NCAA, NBA, NHL, NFL, MLS and MLB. ![]()
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