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LEARNING RESOURCE

Individual Tax Fundamentals — Tax Staff
Essentials as a board member of Ohio Northern University’s
Dicke College of Business Administration. She
Understand how to respond to the needs of new and notes that NIL may also be subject to state and
existing clients. Add value to your tax practice with local income taxes. In addition, while a student is
tax-saving strategies for your individual clients.
typically subject to the lowest federal tax rates, the
CPE SELF-STUDY income from the NIL is likely to push the student
into a higher tax bracket, subjecting that income
For more information or to make a purchase, go to aicpa.org/cpe-learning to higher tax rates. For example, if the student-
or call the Institute at 888-777-7077. athlete’s marginal tax rate is 22%, adding to that the
15.3% Self-Employed Contributions Act rate and a
hypothetical 6.5% state tax rate totals 43.8%.
“The key is to plan ahead and make sure to
reserve enough cash to pay the taxes due,” New-
AICPA RESOURCE man said. “Student-athletes also may need to make
estimated tax payments each quarter, versus waiting
The Tax Adviser and Tax Section to pay the full tax bill at tax return filing time.”
Subscribe to the award-winning magazine The Tax Adviser. AICPA
Tax Section members receive a subscription in addition to access AT THE UNIVERSITY LEVEL
to a tax resource library, member-only newsletter, and four free Additionally, universities and colleges across all
webcasts. The Tax Section is leading tax forward with the latest levels of athletics now have an opportunity to
news, tools, webcasts, client support, and more. Learn more at inform and educate their student-athletes on the
aicpa.org/tax-section. The current issue of The Tax Adviser and legal and tax implications of NIL deals. This can be
many other resources are available at thetaxadviser.com. another opportunity for a firm, or even a student
organization, to step in.
Angela Robinson-Pittman, CFO of athletic
services at the University of Mississippi, says that
drive for the duration of the year, a benefit valued at universities are doing their students and athletic
$20,000, the student-athlete could negotiate with departments a disservice if they are not educating
the NIL sponsor for a cash payment of 40% of the and informing everyone involved in the athletics
value of the goods expected to be received. In this process.
example, that would be $8,000. Of course, student- “About twice a year, we invite a CPA firm and
athletes then need to save the cash they received local bank to come speak with our student-athletes
as part of their NIL agreement to pay their tax in what we call our financial education program,”
liability come tax season. she said. “The firm discusses tax implications of
Deann Newman, CPA, is a retired Deloitte tax NIL contracts and covers how to organize 1099s
partner who previously worked with high-net- and expenses.”
worth individuals and has discussed NIL at the col- As well as providing these services to student-
lege and not-for-profit level as part of her activities athletes, universities can tap into their student
organizations and other resources on campus.
For example, the Beta Alpha Psi chapter at Ohio
Northern University offers monthly tax planning
and investment basics courses for students on cam-
pus in addition to the chapter’s Volunteer Income
Tax Assistance (VITA) program, which offers free
tax return preparation to students on campus and
members of the community. Campus business incu-
bators and centers for entrepreneurship are another
valuable resource, often housed in the college of
business, for helping students to develop a business.
As more guidance and support is published by
states and the NCAA, firms and universities must
continue to be adaptive and proactive in supporting
students and universities in this new space. ■

30 | Journal of Accountancy April 2023