What do NFL of Famer Lawrence Taylor, boxing legend Mike Tyson, golfing great John Daly, and tennis star Boris Becker have in common?
Yes, they all competed at the highest level in their respective sports, but each suffered through overwhelming tax trouble.
Tax Risk Factors for Athletes
Professional athletes face numerous
tax risks that can lead to financial trouble if not properly managed. A lack of financial planning and poor budgeting can result in missed tax payments, penalties, and accumulating debt. Major life events such as divorce and child support obligations can further complicate tax liabilities, especially if not factored into financial planning. Reckless spending and a lack of knowledge about tax laws can leave athletes vulnerable to unexpected tax burdens. Additionally, income streams from investments, memorabilia contracts, private businesses, local endorsements, and speaking engagements may create complex tax situations that require careful oversight.
NIL Deals & Young Athletes
NIL deals complicate tax matters for collegiate and teen athletes.
Paige Bueckers, a collegiate basketball guard for the UConn Huskies, earns over a million dollars in NIL and endorsements. Bueckers’ endorsement contracts include brands like Topps, Dunkin’, UConn NIL Store, Bleeding Blue For Good, Leaf Trading Cards, GoArmy, Nike, Ibotta, Chegg, The Players Trunk, Nerf, Bose, Crocs, Gatorade, StockX, Madison Reed, Panini America, and Gatorade.
In a 2025 interview, Bueckers, “It’s definitely crazy. You become an adult before you’re actually an adult. I have a financial adviser, thank goodness, because taxes, that’s insane to me—I can’t believe I’m actually a part of that world now.”
NIL deals have even reached down to the high school level. In 2024, 13-year-old McKenna Whitham became the youngest women’s soccer player and youngest athlete in any sport to sign an NIL deal with Nike, estimated to be over $1 million.
Athletes with Name, Image, and Likeness (NIL) deals face unique tax risks that can quickly become overwhelming without proper planning. Unlike traditional salaries, NIL earnings often come from multiple sources, such as endorsements, sponsorships, merchandise sales, and social media partnerships, each with its own tax implications. Many young athletes are unaware that these earnings are typically classified as self-employment income, meaning they are responsible for paying both income and self-employment taxes. Without proper withholding or estimated tax payments, they may face hefty tax bills, penalties, and interest. Additionally, NIL contracts often involve multi-state tax obligations, requiring athletes to pay taxes in different jurisdictions based on where the income is earned. Expenses related to NIL activities, such as marketing, training, and legal fees, can sometimes be deducted, but failure to track these properly can lead to missed opportunities for tax savings. Without financial education and professional guidance, athletes may unknowingly underreport income or mishandle deductions, putting them at risk for audits or legal trouble.
What about athletes who are not earning millions?
Athletes, like collegiate athletes, semi-professionals, and professional athletes competing in small markets must also be aware of tax complexities and risks.
Even small amounts of tax avoidance have considerable ramifications for athletes. According to Seattle Legal Services, if you neglect paying a $20,000 tax bill, you can incur up to $10,000 in late payment and filing penalties. Plus, interest will be imposed on the tax liability, and this interest will compound.
Player Supports Services Prioritizes Athlete Financial Well-Being
Many athletes struggle with financial inexperience and lack the necessary knowledge to manage their taxes effectively. Player Support Services, Ltd. (PSS) plays a vital role in helping athletes avoid tax troubles by providing financial education, organizational support, and access to vetted, qualified and trusted advisors who understand the complexities of athlete income. In addition, PSS has global advisors to educate athletes on the complexities of international tax laws, ensuring they understand their obligations when earning income across different countries.
Also, Player Support Service helps athletes look beyond their playing careers by developing long-term financial plans that secure their wealth and prepare them for life after sports. Our goal is to ensure athletes transition smoothly into retirement without financial strain.
In a world where even the most successful athletes have faced devastating tax issues, the need for proper financial guidance is undeniable. Whether an athlete is earning millions through endorsements or competing in a smaller market, tax obligations must be taken seriously. Player Support Services, Ltd. provides the education, resources, and expert financial network necessary to help athletes navigate these challenges, avoid costly mistakes, and secure their financial future. With the right support system in place, athletes can focus on their careers without the looming threat of tax troubles disrupting their success.
JJ Weber, M.Ed. is a Co-Founder of Player Support Services and Director of Sports and Injury Psychology with over two decades of experience working with professional, Olympic, and elite athletes. If you have any questions about PSS financial services or other offerings (Performance, Physical, Mental, Family, or Post-Career Well-Being), please email JJ Weber, M.Ed. joe@player-support.com.
