STUDENT ATHLETES

Student-Athlete Taxes: Managing Multiple Income Sources

For many student-athletes, income doesn’t come from just one place. Scholarships, stipends, part-time jobs and other forms of compensation can all flow in at different times throughout the year. While each source may seem manageable on its own, taxes become more complicated when multiple income streams are involved. Understanding how these earnings work together can help prevent confusion and unexpected tax issues later.

Not all money received by a student-athlete is taxed the same way. Some scholarships or Alston Awards used for qualified education expenses like tuition and required fees may be tax-free, while amounts used for nonqualified expenses like room and board can be taxable. Income from jobs, appearances or other paid activities is generally considered taxable income. Knowing which funds fall into each category is an important first step toward staying organized.

Another challenge with multiple income sources is withholding. Part-time jobs often withhold taxes automatically, but other forms of income such as name, image and likeness (NIL) payments may not. When taxes are not withheld, you may still owe money at tax time. Setting aside a portion of this income as it comes in — as much as 40% — can help reduce stress and avoid last-minute scrambling.

Record keeping plays a key role in managing taxes effectively. Saving pay stubs, contracts and annual tax forms allows you to verify your income and report it accurately. Even small amounts add up over time, and missing documentation can lead to mistakes or delays when filing.

Understanding taxes doesn’t mean having every rule memorized right away. It means being aware that different income sources are treated differently and planning accordingly. By staying informed and organized, student-athletes can approach tax season with more confidence and fewer surprises, allowing them to focus on both their sport and their financial well-being.

Sources:

https://www.irs.gov/individuals/students

https://www.irs.gov/credits-deductions/individuals/education-credits-questions-and-answers

https://www.investopedia.com/terms/t/taxableincome.asp

https://www.squire.com/resources/blog/navigating-complex-tax-maze-student-athletes/