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Larry The Wise CPA | Tax | Finance | Wealth

@thewisecpa

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This 1099 detail costs athletes millions. You filed the LLC papers. Got the business bank account. Felt official. Then signed your first brand deal and filled out the W-9 with your Social Security Number. Wrong number. Here's what happens when your 1099 shows up with your SSN instead of your business EIN: The IRS sees you as an individual, not a business owner. All that money you spent setting up the LLC? Wasted. Three problems this creates: β†’ Your liability protection weakens The whole point of the LLC is separating personal and business. When you use your SSN on contracts, you're mixing them back together. β†’ You trigger IRS attention High income on a personal ID plus business deductions equals audit flags. I've seen this pattern dozens of times. β†’ Your bookkeeping gets messy Half your income flows to your SSN, half to your EIN. Good luck explaining that during tax season. Your LLC comes with an EIN for a reason. That's your business ID number. Action step: Pull up every W-9 you've submitted to sponsors, collectives, or brands. If it shows your SSN, contact them and submit a corrected W-9 with your EIN. Most will update it without drama. Some need it before they issue the next payment. Don't wait until January when 1099s get filed. Like and share if you're checking your W-9s this week πŸ’ͺ Tag a teammate who needs to see this. #NILTax #StudentAthleteTips #TaxStrategy #NILDeals #AthleteFinance #TheWiseCPA #CollegeAthletes #FinancialEducation by @thewisecpa
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9 months ago
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IRS says your NIL money isn't royalty. Here's what keeps happening. Athletes get their first revenue share check and treat it like mailbox money. Passive income. Set it and forget it. Schools report it as royalties on your 1099. Box 2. Why? Because that's the easiest path for them. No payroll taxes, no W-2 paperwork, no complications. They're treating you like you sold them a logo and walked away. But you didn't walk away. You're training every day. Creating content for sponsors. Showing up at events. Building your brand on and off the field. The IRS has a name for this: Material Participation. Translation: if you're actively working to earn that income, they're going to tax it like work income. Not passive royalties. Self-employment. That means an extra 15.3% in self-employment tax on top of everything else. Social Security πŸ’Έ Medicare πŸ’Έ Federal income tax πŸ’Έ State tax πŸ’Έ Total damage? You're handing over 40-50% of that check. Most athletes aren't planning for this. And here's the thing... most CPAs aren't either. The new NCAA settlement rules are too fresh. They're not tracking how the IRS might respond. I work with athletes on this every week. Here's what actually protects you. Set aside 40% of every check before you spend a dollar. Different account. Locked away. Track every expense that's connected to your NIL work. Agent fees, gear, travel, production costs for content. Every receipt matters because deductions are your protection. Treat this like you're running a business. The IRS already is. I've worked with athletes who got caught off guard by this reclassification. The tax bill hits hard when you're not ready for it. You've got time to get ahead of this. Most don't realize that yet. Who's helping you think through this tax situation? If nobody's in your corner on this, that's a problem worth fixing. Tag a teammate who needs to understand this before they spend their whole check 🏈 #NILTaxes #StudentAthleteFinance #NILIncome #AthleteTaxPlanning #RevenueShareTax #TheWiseCPA by @thewisecpa
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9 months ago
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NIL teammate compensation simplified. I've got the playbook. You sign a big deal. First instinct? Take care of the guys blocking for you. The ones setting the screens. I respect that. That’s leadership. But the IRS and the NCAA? They don’t care about vibes. They care about documentation. If you just start handing out cash, you’re walking into a compliance trap. Here is the reality check most skip: Because NIL money is self-employment income, you are a business. This gives you exactly two strategic lanes to move money to your team. Lane 1: Employment πŸ’Ό You hire them. They do actual workβ€”security, editing, brand hype. β†’ You get a tax deduction (Business Expense) β†’ They pay taxes on that income Lane 2: Gifting 🎁 You just give them cash or gear. β†’ You get ZERO tax deduction β†’ They pay ZERO tax (up to $19,000/year per person) See the friction? Hiring helps YOUR tax bill but hurts theirs. Gifting hurts YOUR tax bill but keeps theirs clean. The IRS demands a "Valid Business Purpose" for Lane 1. You cannot pay a lineman for blocking. That’s pay-for-play. But you can pay him for "Personal Security" at your camp. Smart athletes use a hybrid model. Hire the teammates with actual skills (video, management). Gift the ones who just need the support. Documentation is your insurance policy. Contracts. 1099s. Fair market rates. Don't let your generosity become an audit trigger. Save this for when the check hits. πŸ’Ύ Share this with a teammate who just got paid. #NIL #StudentAthlete #TaxStrategy #NCAA #FinancialLiteracy #TheWiseCPA #NILDeals #CollegeFootball #CollegeBasketball by @thewisecpa
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9 months ago
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You're a student-athlete making NIL money. Hit $400, and suddenly the IRS considers you a business owner. Most schools teach algebra, not how to face this reality. We drill quadratic equations into kids but don't tell them that a 1099-NEC means zero taxes were withheld. Here’s what actually happens. A 19-year-old football player has a breakout season. Earns $25,000 from appearances and social posts. He thinks "cool, pocket money." He spends it. April arrives. He owes the IRS roughly $5,500. He has $0 left. That’s not a "learning opportunity." That’s a hole you have to dig yourself out of. The IRS doesn't care about your GPA. If you are earning, you are a business. πŸ‘‰ The money isn't all yours. πŸ‘‰ Save 30% immediately. πŸ‘‰ Track every dollar you spend to earn it. Financial literacy should be a graduation requirement. Until then... you have to be your own CFO. Drop a πŸ’― if you think schools need to update their playbook. Share this with a teammate who is spending like taxes don't exist. #NIL #StudentAthlete #FinancialLiteracy #TheWiseCPA #CollegeSports #TaxSeason by @thewisecpa
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10 months ago
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Your family accountant isn't enough. It feels safe to stick with the people you know. Maybe your parents' tax guy or a friend from home. But loyalty to generic advice is expensive. When you treat your financial team like a favor to friends... you lose. Real wealth is built by a specialized "Core Four." Your starting lineup for money: πŸ“ Specialized CPA. Not a generalist. Someone who eats jock tax and multi-state filings for breakfast. πŸ“ Wealth-Focused Advisor. Someone planning your exit strategy, not just selling you products. πŸ“ Attorney. To catch the fine print that generic lawyers miss. πŸ“ Agent. For sourcing, not just signing. Generic advisors cost you money. Specialized advisors save you more than they charge. Don't wait until April 14th. Build the roster before the season starts. Drop a πŸ›οΈ if you’re building your team this year. #NIL #StudentAthlete #FinancialLiteracy #TheWiseCPA #AthleteWealth by @thewisecpa
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10 months ago
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Turn bowl season NIL into lasting wealth. Bowl season is wild. The gear, the gifts, the national spotlight. But there's a tax trap hiding in all of it. You're in a 10-day window where income spikes fast and zero taxes get withheld. While you're locked in on game prep, the IRS is tracking every dollar. Most athletes miss these: πŸ‘‰ That "free" bowl gift package worth $550? Taxable at fair market value. Even if you never open it. πŸ‘‰ Performance bonus when you win? You'll likely owe taxes in the state where you played, not where you live. πŸ‘‰ Autograph session at the hotel? That's work. That's taxable income in that state. The part nobody explains... When you earn NIL income, the IRS classifies you as self-employed. There's a 15.3% self-employment tax that hits before you even get to income tax brackets. I see athletes find out about this in April. Way too late to plan around it. My advice: set aside 30% of everything landing in your account this month. Treat it like film study. You don't skip it. Bowl season is your reward for the grind. Don't let weak tax planning turn it into a problem when April rolls around. Your playing career has an expiration date. Your wealth doesn't have to. Drop a 🏈 if you're locking in your financial game plan this bowl season. Share this with a teammate who thinks the swag is free πŸ’° #NILtax #studentathlete #bowlseason #taxplanning #NILdeals #collegeathlete #financialliteracy #athletewealth #TheWiseCPA #NILmoney by @thewisecpa
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10 months ago
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Turn WNBA paychecks into lasting wealth. The headlines are loud right now. WNBA salaries could hit an average of $460,000 by 2026. That’s a win. But here is the opponent that isn't on the scouting report: The schedule. Every state you play in wants a cut of that check. We call it the "jock tax." And without a game plan, that $460k shrinks fast. Here is where the money goes πŸ“‰ πŸ“ 30 days in California? They want ~12% of that income. πŸ“ 20 days in New York? Say goodbye to ~10%. πŸ“ Illinois, Minnesota, DC... they all line up. The money leaks out in layers. First Federal (32-35%) Then FICA (~$19k) Then the multi-state tax bill (~$20k+) Suddenly, your take-home is closer to $250k. Before you even pay your agent. The difference between rich and wealthy? How much you keep. You need a multi-state tax strategy. Not just a tax return. Like & Share if you think financial literacy is the real MVP πŸ€πŸ’Έ #WNBA #FinancialLiteracy #JockTax #AthleteWealth #TheWiseCPA #WomenInSports by @thewisecpa
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10 months ago
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My view of taxes completely changed. I spent 19 years thinking tax planning was compliance work. File on time. Pay what you owe. Done. Then I watched two athletes do the same work. Put in the same hours. Built the same following. One walked away with $97k after tax. The other? $381k. Same effort. Different structure. Here's what I learned. DEAL A: $200K ENDORSEMENT ✍️ Looks like a win. Feels like a win. Then the math hits. Taxed as ordinary income + self-employment tax: β†’ Agent & expenses: -$20k β†’ Tax bill: -$82k β†’ You keep: $97k Effective rate: 41% gone before you spend a dollar. DEAL B: EQUITY STAKE πŸ“Š 10% ownership in a brand. You sell later for $500k. Taxed as long-term capital gains: β†’ Tax bill: -$119k β†’ You keep: $381k Effective rate: 24%. Four times more money in your pocket from the same amount of work. The tax code rewards ownership. Endorsement checks get hit hard. Equity gets preferential treatment. You're already building value for brands. Stop getting paid like an employee. Start getting paid like an owner. Ask for equity when you're at the table. Structure your deals through an entity. Build wealth that compounds, not income that disappears. Every dollar you save in taxes is a dollar working for you for decades. Like & share if you're done leaving money on the table πŸ’° #NILTax #StudentAthletes #TaxPlanning #AthleteWealth #TheWiseCPA #NILDeals #SportsFinance by @thewisecpa
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10 months ago
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High school athlete to savvy entrepreneur starts now. Ohio just became the 45th state to approve NIL for high school athletes. Takes effect now. Here's what nobody tells you about your first NIL check. You get paid $500 for an appearance or social post? The IRS stops seeing a student athlete. They see self-employment income. That word scares parents. But here's your edge πŸ‘‡ Self-employed means the tax code works in your favor: βœ“ Training gear and travel? Tax deductions. βœ“ Roth IRA contributions? Tax-free growth for 50+ years. βœ“ LLC setup? Legal protection before you need it. βœ“ Quarterly tax planning? Keeps you ahead of April surprises. You're learning financial strategy at 16 or 17 that most people fumble until their 30s. The tax code has rules. Learn them while you're young and keep more of every dollar you earn. Know an Ohio athlete signing their first deal? Share this πŸ’° #NILtaxes #OhioAthletes #OHSAA #StudentAthleteNIL #NILdeals #HighSchoolSports #TheWiseCPA by @thewisecpa
0
a year ago
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NIL money today, tax problems tomorrow? You're getting paid for your NIL. That first check feels like a win. Then April shows up. I've seen this happen over and over: athlete earns $15K from NIL deals, spends it, then gets hit with a $4,500 tax bill they weren't expecting. No money set aside. Zero cushion. Here's the part nobody explained when you signed that deal πŸ’° Earn $400 in NIL income? The IRS treats you as self-employed. You'll pay 15.3% self-employment tax plus your regular income tax. If you'll owe $1,000+ for the year, you need quarterly estimated payments: β†’ April 15 β†’ June 15 β†’ September 15 β†’ January 15 Skip them and the penalties add up fast. Here's the sneaky part about FAFSA. Your NIL income today won't affect this year's financial aid. It affects aid two years from now. The money you're earning in 2025 could shrink your aid package in 2027. Prior-prior year reporting means there's a delay before the impact shows up. You're probably missing deductions you're entitled to: β†’ Travel to NIL events β†’ Equipment you bought β†’ Marketing costs β†’ Professional fees Those deductions lower your taxable income. They keep more money in your pocket. What you need to do right now πŸ“Œ Set aside 25-30% of every NIL payment the moment you get it. Don't wait until taxes are due. Document every business expense. Keep receipts. Track mileage. Save invoices. Your playing career has an expiration date. Your wealth doesn't have to. Questions about NIL taxes? Drop them below πŸ‘‡ Know a student-athlete earning NIL money? Share this with them. Could save thousands in penalties and missed deductions. #NILTaxes #StudentAthletes #NILIncome #CollegeAthletes #NILDeals #TaxStrategy #AthleteMoney #NILFinance #CollegeSports #SelfEmployedAthlete #TaxPlanning by @thewisecpa
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a year ago
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I've saved athletes an average of $8,500. Here's what you're missing with your NIL income. Made $400+ from NIL deals? The IRS sees you as self-employed now. You're an entrepreneur, whether you feel like one or not. Here's where athletes leave money on the table: An LLC gives you structure for tracking income and deducting expenses. But the LLC alone doesn't cut your tax bill. The move that saves thousands? S Corporation election on top of the LLC. This slashes self-employment tax. Real money back in your pocket. Your NIL income falls into 2 categories πŸ’° Appearance fees, autograph signings, speaking gigs β†’ ordinary income on Schedule C. Self-employment tax applies. Merch with your name, passive licensing deals β†’ royalty income on Schedule E. Lower tax bill. Knowing the difference saves you money. State taxes add another layer πŸ“ Going to school in Georgia but you're from Texas? Both states want a cut of your NIL money. Don't wait until April to figure this out. Skip the $99 online LLC services unless you know exactly what you need for NIL. They're built for general businesses, not athlete income. Watch out for advisors asking for a percentage of your NIL deals. Fee-for-service keeps more money in your pocket long term. The bigger problem: Treating NIL income like a bonus check instead of business revenue. Your playing career has a short window. Your wealth strategy doesn't. The tax code is built to reward business owners. You are one now. Structure it right, and you keep what you earn. Like & share if you're done watching NIL money vanish at tax time πŸ† #NILIncome #StudentAthleteTaxes #NILTaxStrategy #CollegeAthletes #NILDeals #TaxPlanningForAthletes #NILMoney #AthleteWealth #TheWiseCPA #CPAForAthletes #NILFinance #StudentAthleteFinance by @thewisecpa
0
a year ago
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NIL money today, tax problems tomorrow? First NIL deal hits. $5,000. $50,000. Sometimes more. You're celebrating. Family's proud. The money's real. Then April comes. And you owe the IRS way more than you expected. When you earned $400+ from NIL, the IRS classified you as self-employed. Not an employee. A business owner. πŸ’Ό You know how you don't wait until kickoff to start game prep? Same logic applies to your NIL income. Too many athletes sign NIL deals in their personal name. Treat the money like a regular paycheck. Never set up a business structure. On $50,000 in NIL income, this costs you $7,500+ in unnecessary taxes. Without an LLC taxed as an S-corp, you're paying 15.3% self-employment tax on top of your regular income tax. You're missing deductions business owners get... travel, equipment, training expenses. πŸ’Έ Zero asset protection. The move: Set up your LLC before you sign contracts. Not after. Before. When you sign deals in your LLC's name instead of your personal name, you create legal separation. Different tax treatment. Better protection. Then get a CPA who specializes in NIL income. General accountants will treat you like any other self-employed person and you'll still overpay. Athletes earning serious NIL money have wealth-building options available. Like using a mega backdoor Roth to turn $70k invested annually over three years into roughly $2.5 million by retirement age. πŸ“ˆ Your playing career has an expiration date. Maybe four years of college. Maybe a few years pro if you're lucky. But your wealth doesn't have to. Athletes who treat NIL income like a business from day one build real wealth. The ones who treat it like a paycheck pay for this mistake every single tax season. You get to choose. πŸ’¬ Share this with any athlete who landed their first NIL deal. They'll thank you in April. πŸ’° #NILIncome #StudentAthletes #NILTaxStrategy #CollegeAthletes #AthleteTaxPlanning #NILDeals #WealthBuilding #CPAforAthletes #FinancialLiteracy #TheWiseCPA by @thewisecpa
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a year ago
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