Lesson 2 of 6
Taxes 101 (the surprise that gets people)
Here’s a trap that wrecks young athletes: they get a check, spend all of it, and then find out they owe taxes on it. NIL money, camp money, prize money — most of it is “1099” income, which means nobody took taxes out for you. You owe them later.
- ●When you’re paid as a contractor (a 1099), no taxes are withheld — it’s on you to set money aside.
- ●A safe habit: the moment money comes in, move roughly a quarter to a third of it to a separate “taxes” savings spot and don’t touch it.
- ●Keep records of what you earned and any expenses. When in doubt, a real tax preparer is cheap insurance.
Coach Fite
The fastest way to turn a blessing into a problem is to spend money the government already has its hand on. Set the tax money aside the day it hits. Future you will shake present you’s hand.
The bottom line
If nobody took taxes out, you still owe them. Set aside a third of every 1099 check the day it lands.