Good. Welcome to the real world. Maybe some will now have to learn some math and basic accounting.

Au’Diese Toney, a guard for the Arkansas Razorbacks last season, has a pasta dish named after him at Bordinos, a swanky Italian joint near campus in Fayetteville, Ark. It’s the kind of deal that college athletes can now strike under new rules that allow them to cash in on their name, image and likeness.

Toney acknowledged that it hadn’t occurred to him that Uncle Sam would be taking a bite out of every plate of Cajun-inspired fettuccine with shrimp and wild-boar sausage, a play on the university mascot, sold through the partnership.

“It’s just a blessing to you to even have a pasta named after you,” said Toney, who has used his earnings to make his car payments.

Toney’s agent, Stanley Hastings, said the dish has been a hit, with more than 20 orders on its opening night. “Au’Diese is a sneaky foodie.”



College basketball season may be over, but tax season is about to reach its climax. The NCAA changed its rules last summer to allow college athletes to make money off of their name, image and likeness. As a result, thousands of college athletes with deals will be on the hook to file their own taxes this month, whether they are raking in six-figures from sponsorships or have meager income from social-media posts.

Dealing with the Internal Revenue Service could come as a bit of a shock.

“Although NIL [name, image and likeness] is a wonderful thing and it will get figured out…there will be bumps in the road and one of them is going to be April 18,” said Peter Schoenthal, chief executive of Athliance, a platform that helps athletic departments navigate NCAA compliance rules. A criminal defense lawyer by training, Schoenthal said that he founded the company in 2020 because he realized taxes would be a pain point in this new era for college athletes.

“I didn’t want to represent them in federal court on tax evasion charges,” he said.

Given the rigors that come with training to be a Division I athlete, many college students will be wading through tax forms for the first time this month.

“I actually have never worked a job, really, with hours,” said Arkansas guard Stanley Umude. He said that he has done the occasional babysitting or lawn mowing gig, but his payment always came in cash.

Plenty more athletes, like Villanova fifth-year forward Jermaine Samuels, only had time to work at basketball youth camps during the summers. But half a decade removed from his last job, Samuels did a handful of local commercials and even went up to New York City for the day to take part in an ad campaign for Tampa Bay quarterback Tom Brady’s clothing brand.

“I had makeup on for the first time,” Samuels recalled of the November 2021 photo shoot. “It’s a whole different world when it comes to modeling and taking pictures.”



When informed earlier this month that the federal deadline was around the corner, Samuels suspected that Villanova might help him and his teammates handle their tax forms. If not, his backup plan was his parents — something of which he had yet to inform them as of April 1.

“I think I should be having that conversation [with my parents] pretty soon,” he said with a laugh.

Without much experience working salaried jobs, the concept of setting aside a chunk of income for the government is foreign to undergraduates seeing dollar signs from all the potential deals coming their way.

Further complicating matters, much of the compensation for college athletes in the last 10 months has been in the form of pizza slices, fried chicken sandwiches or, in the extreme case of Kentucky men’s basketball, short-term leases on Porsches.

Even though that compensation doesn’t come in the form of a paycheck, it still has value that is taxable according to federal law. Additionally, endorsements deals—like Toney’s eponymous fettuccine—tend to be paid out via lump sums. It is up to the recipient to set aside a portion of that income to cover the taxes they will ultimately owe on it.

That can lead to what H&R Block chief executive Jeff Jones called “negative surprises.”

“Any time something is so new, there is just misunderstanding, especially for student athletes who most likely have never had to think about this topic ever before,” Jones said. “The biggest surprise worry is owing money.”



Thanks to new NCAA rules, student athletes can now make money from their name, image and likeness. WSJ’s Laine Higgins explains the new world of lucrative brand and endorsement opportunities for college athletes. Photo: Gatorade/Getty Images
H&R Block is playing both sides. In addition to providing free resources to college athletes on its website, the firm put forth $1 million to sponsor female college athletes and provide them with tax preparation services. Jones said the deal, dubbed “A Fair Shot,” focuses on female athletes because their national exposure and earning potential tends to peak in college due to gendered income disparities at the professional level. H&R Block has signed 19 women so far, including Iowa’s Caitlin Clark and Oregon’s Sedona Prince, and plans to add more, according to a company spokesperson.

Most athletes qualify as “self-employed individuals” on their tax return and need to submit a 1099 form for each gig they book. Some platforms that facilitate deals between athletes and brands, such as INFLCR and Opendorse, compile these forms in one place in their apps.

Top earners and self-starters—or athletes with sharp agents—might have opted to set up a limited liability company to absorb their earnings. Forming an LLC allows athletes to write off certain expenses associated with their business deals, such as flights to a photo shoot. Forward-thinking athletes with LLCs can also contribute money pretax to a SEPP IRA account to jump-start their retirement savings.

Gregg Cascaes, who manages finances for several Minnesota-based professional basketball and football players, did many of these things for his client, Paige Bueckers. A star even before arriving at UConn, Bueckers’s one million Instagram followers make her perhaps the nation’s most marketable college athlete. Knowing that her earnings would be substantial, Cascaes advised the Bueckers to set up an LLC in Delaware, a state known for its tax-friendly laws.

She’s since signed major deals with Gatorade, education company Chegg and StockX, an online resale marketplace primarily known for sneakers, but neither Bueckers nor Cascaes would say how much she’s raked in.

“She will make 10x more money off the court than she will on the court, the way that the current salary structure is set up in the WNBA,” Cascaes said. Salaries in the WNBA currently top out at $228,094 with just three players on “supermax” contracts, according to Spotrac.

Given her sizable endorsement income, Bueckers most likely can’t be claimed as a dependent by her parents. But that’s not the case for many athletes. Even those on full scholarships might still depend on the Bank of Mom and Dad in the eyes of the government. Determining that cutoff point for parents used to claiming a tax-credit for their children is another potential hiccup, said Jones.

The biggest pitfalls with filing taxes are more fundamental and possibly more troublesome. Athliance’s Schoenthal, who spoke with dozens of athletes at the NCAA Constitutional Convention in January, said that many are not reporting their endorsement deals to their university compliance departments on the belief that it will exempt them from owing taxes on the income. That is unquestionably inaccurate.

“Tax liens are going to be the new student loans,” Schoenthal predicted.

Not every college sports star is in the dark. When he was a five-star recruit in high school, Duke point guard Jeremy Roach picked up a side hustle in 2020 when his high school classes went remote.

“I worked for Instacart…because everybody, obviously, was too scared to go out and get their groceries,” Roach said. He also filed a tax return.

Now a sophomore who is the face of “True Blue Basketball Camp” alongside two teammates and charges between $80 and $200 per video shout-out via Cameo, Roach now stands out from his Duke teammates in a crucial way: he knows he’s going to have to pay his taxes.

“I wouldn’t say I’m an expert in finance,” said Roach, who has yet to declare a major, “but I know I’m going to have to file taxes on any little thing I get.”


LINK: https://www.wsj.com/articles/c...feature_below_a_pos1

In college and have never had a job with hours? He deserves to have a huge tax bill for being stupid. And the other one is going to run to mommy and daddy for help. You’re raising up some real winners there mom and dad.

Getting paid to play children's game. Must be a hard life while the rest of us shmucks deal with things such as unemployment, out of control inflation, underemployment, etc.

quote:

Not every college sports star is in the dark. When he was a five-star recruit in high school, Duke point guard Jeremy Roach picked up a side hustle in 2020 when his high school classes went remote.

^^^^^^^^^^^^^
Hmmm. Maybe that is why he was enrolled at Duke.

quote:

Originally posted by mrvmax:
In college and have never had a job with hours? He deserves to have a huge tax bill for being stupid. And the other one is going to run to mommy and daddy for help. You’re raising up some real winners there mom and dad.

I never had a paying job with taxes until after College. I worked landscaping during summers for a friends business.

With that said how in the world do you think you are ever getting money from anyone unless it's cash and not thinking you have to pay taxes.

quote:

Originally posted by ZSMICHAEL:
Au’Diese...

For fuck's sake.

I don't think many will be too lost... the ones making real money will just pay someone to do it for them... others will figure out the schedules C and SE. And what the real message in that schedule C form is... the way to reduce your taxes is simple... spend money on the 'business'.

And a few will be stupid, ignore their income tax liability, get their peepees smacked by the IRS, and serve as a handy example to the rest of what not to do.

Au’Diese? Why not just name him oh snap instead? Handing down names to children that sound French & ancestry doesn’t exactly equate to providing sophistication? Royalty is a birthright & not an Instagram moniker..

I like AuJous.

The colleges/NCAA/agents are making a fortune off these kids. All three of them should be ensuring that they take basic personal finance classes. In fact I don't think a single kid should graduate without taking a year of personal finance and home economics classes. Where are the damn parents?

I'm not just talking about these college athletes. The fact that an 18 year old leaves home without knowing how to cook; clean; balance a checkbook; do laundry; fill out taxes; and know a hammer from a Philips head is a shame. The kids leaving home with those skills have a huge leg up on those that the parents and schools didn't provide basic life skills.

quote:

Originally posted by ZSMICHAEL:
I like AuJous.

So do I.

This thread reminds me of when I got out of the Army and was in College taking Econ 101. It was tax time and the professor started the class by asking how many there would be filing income taxes. Everybody raised their hand. Guess we were all working our way through.

Next he asked how many were having H&R Block or somebody like them do the taxes. Everybody but one (me) raised their hands.

Next he asked how many were doing their own. I was the only one to raise my hand.

He told the class I was the only smart one in the class as everyone else was undoubtedly doing short form and it was dumb to pay someone to do it.

This is a nothing burger issue. The jock with the NIL deal has to deal with taxes the same as their classmate who has a part time job. Like there aren't multiple boosters who just happen to be accountants or know accountants who are willing to help. The booster accountant can hire accounting students as interns to help manage the tax filings for the jocks. Where's my consulting fee?

I think you are naive. Look at the former WNBA star locked up in Russia. Talk about stupid. Sadly many of these "athletes" have never held a job and cannot write a complete sentence. They do not all have Boosters to do if for them. If it is free money often paid in "free short term" Porsche rentals, I doubt that they realize that is taxable. Take a look at the financial aucmen of NFL athletes. Many are peniless a few years down the road. Guess some of us are out of touch with the average college athlete.

quote:

He told the class I was the only smart one in the class as everyone else was undoubtedly doing short form and it was dumb to pay someone to do it.

^^^^^^^^^^^
I started working at 14 and paid and filed my own taxes until I became self employed.

I think it highlights how isolated and removed they are from the real world. The world we live in.

For every successful one how many useless ones are washed up before they finish college? College which didn't give them a marketable skill.

This message has been edited. Last edited by: braillediver,

Welcome to the first day of Real World 101.
First lesson ? Uncle Sam gets his. Always.

Welcome to the Republican Party

Not sure how these athletes get paid... for most folks with a job the taxes come out of their pay check before they even get it... but these sponsorships might be like me and they just get a check.... then you are responsible for paying off uncle Sam at the end of the year... Uk tries to make it 'easier' on us by convincing us that paying what we think we owe quarterly is best.... I'm not one to argue with the pubic accountants... but I've never played that game. You can't be penalized for not paying quarterly ... unless you start paying quarterly and then don't pay enough or then stop paying quarterly...

They will be paid as independent contractors. What makes it difficult is some of them are paid with things like free pizza for a year or short term lease on a high end vehicle. Those things will have to be assigned a monetary value and tax paid accordingly. Kind of like when you win the "free vacation" on some game show.