As college athletes cash in on NIL, tax experts and schools remind them to pay Uncle Sam

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College athletes making money on NIL deals, reminded to pay taxes

With sponsorships worth multi-millions suddenly available to young students, some universities are urging them to set aside enough of their new earnings to cover taxes. Is the message getting through?

Rayquan Smith, a two-sport athlete at Norfolk State University, has been nicknamed "King of NIL" for hustling to obtain about 75 sponsorships that he says will pay him about $40,000 this year.
  • Rayquan Smith of Norfolk State University has become “King of NIL” despite playing at small school.
  • Accountants says student-athletes should set up retirement accounts to shelter income from taxes.
  • Some schools like University of Illinois are teaching student athletes financial literacy.

Rayquan Smith doesn’t play football or compete as a decathlete at a major college, but that hasn’t stopped the Norfolk State University dual athlete from cashing in on sponsorships that are now allowed under a new policy changing the financial landscape  in amateur sports. 

Until last July, student-athletes couldn’t profit if their name, image or likeness was used to sell products. Now, under the new NIL policy introduced in summer 2021, they can, and many are learning their new-found earnings come with responsibilities beyond going to practice and marketing themselves.

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