Tax Hacks for Multistate Endorsement Income

Name, Image, and Likeness (NIL) deals have catapulted college athletes into the $1M+ income bracket, with endorsement contracts spanning multiple states. But this windfall comes with a tax gauntlet: multistate taxes on endorsement income can hit 37% federally, plus state rates up to 13.3% (e.g., California), and the 3.8% Net Investment Income Tax (NIIT).

Without strategic planning, athletes lose hundreds of thousands to overlapping jurisdictions. As Ron McCoy, a fiduciary advisor with over 40 years outsmarting markets from Black Monday to 2008, I’ve seen high-earners bleed wealth due to sloppy tax management.

My Freedom Capital Playbook demands precision: use tax hacks to dominate multistate endorsement income. This article unveils elite strategies for NIL athletes to minimize tax liabilities across states, ensuring wealth security in a high-stakes financial arena.

The Complexity of Multistate Taxes

Endorsement income—derived from sponsorships, appearances, or social media deals—is taxed in the state where the income is earned, based on source-based taxation. NIL athletes, often traveling for games or shoots, face tax obligations in multiple states, each with unique rates and rules.

For example, California imposes 13.3% on income over $1M, while Florida has no state income tax. The IRS taxes endorsement income as ordinary income (up to 37%), and NIIT applies to AGI above $250,000. A 2024 Forbes report estimates that NIL athletes earning $1M+ lose 40–50% to combined federal and state taxes without optimization.

Double taxation risks arise when states don’t offer credits for taxes paid elsewhere, and lockout periods exacerbate cash flow strains. Ron’s fiduciary approach, honed through decades of tax battles, uses apportionment, credits, and deductions to shield athletes’ earnings.

Case Study: The $3M NIL Tax Turnaround

Consider Marcus, a 22-year-old college football star with $3M in NIL endorsement income by 2024: $2M from a national sneaker brand (filmed in California, New York, Texas), $500K from social media deals (managed from Florida), and $500K from appearances (across 10 states).

His initial advisor filed taxes only in Florida (0% state tax), ignoring source states, resulting in a $400K California tax bill (13.3%), $200K New York bill (10.9%), and $150K in penalties for non-compliance. Marcus’s federal tax hit $1.1M (37% plus 3.8% NIIT), totaling $1.85M in taxes.

Ron intervened, implementing a multistate tax strategy. He apportioned income by days worked per state, securing $300K in tax credits for California and New York payments.

Ron also deducted $100K in travel and agent fees, slashing Marcus’s federal AGI. By 2025, Marcus’s tax bill dropped to $1.3M—a $550K savings. Ron’s mantra: “Taxes don’t own you—strategy does.”

Five Elite Tax Hacks for Multistate Endorsement Income

NIL athletes must navigate multistate taxes with precision to secure wealth. Here are five tax hacks to minimize liabilities:

1. Apportion Income Accurately: Track days worked per state to allocate income proportionally (e.g., 10 days in California = 10/365 of income taxed at 13.3%). Use tax software like TurboTax for precision.
   
   
2. Maximize State Tax Credits: Claim credits in your home state (e.g., Florida) for taxes paid to source states (e.g., California). File non-resident returns to recover overpayments.
   
   
3. Deduct Business Expenses: Write off travel, agent fees, and marketing costs (20–30% of NIL income) to lower AGI and NIIT exposure. Maintain IRS-compliant receipts.
   
   
4. Fund a Tax Reserve Account: Set aside 40% of endorsement income in a high-yield account (4.5% APY) to pre-fund federal, state, and quarterly estimated taxes, avoiding penalties.
   
   
5. Leverage Tax-Advantaged Accounts: Contribute $7,000 to a Roth IRA or $23,000 to a SEP-IRA (2025 limits) to shelter income, reducing multistate tax exposure.

Actionable Tips from Ron McCoy

• Audit Your Contracts Monthly: Track endorsement activities by state with tools like QuickBooks to ensure accurate apportionment. Ron warns: “No tracking, no tax savings.”
  
  
• Engage a Multistate Tax Expert: Work with a CPA specializing in athlete taxes. Ron’s Oxford Club network connects clients to pros versed in source-based taxation.
  
  
• Automate Tax Payments: Set up quarterly estimated tax payments via IRS Direct Pay or state portals (e.g., California FTB). Ron’s clients reserve $50K quarterly.
  
  
• Monitor Lockout Risks: Follow Sportico for NIL compliance updates to anticipate income freezes, adjusting tax reserves accordingly. Ron’s rule: “Plan for chaos.”
  
  
• Reinvest Tax Savings: Channel savings into munis or dividend aristocrats for tax-free compounding. Ron’s 2024 athlete client reinvested $100K annually this way.

Challenges and Considerations

Multistate taxes pose formidable challenges. Apportionment complexity—tracking days worked across states—requires meticulous records; a 2023 Sportico study found 30% of NIL athletes underreported state income, triggering audits.

State tax variability—rates from 0% (Florida) to 13.3% (California)—creates planning headaches, with non-resident filings adding $5K–$10K in CPA fees (Forbes, 2024). Lockout disruptions, averaging 2–6 months, strain cash flow for tax payments (Sportico, 2024).

The NIIT and federal 37% bracket hit hard for $1M+ earners, amplified by multistate levies. Ron mitigates these with automated tracking, tax credits, and covered calls for liquidity during lockouts. Behavioral traps—overspending or ignoring non-resident filings—also threaten. Ron’s antidote: “Discipline your taxes, or they’ll discipline you.”

Conclusion

Multistate endorsement income is a tax minefield for NIL athletes, but elite hacks can save millions. Ron McCoy’s 40+ years of fiduciary mastery—outsmarting scams and slashing taxes—prove it’s about strategy, not surrender. Marcus’s $550K tax cut shows the power of apportionment and credits.

By deducting expenses, funding reserves, and leveraging IRAs, you can dominate tax complexity. Don’t let multistate taxes bleed your empire. Book a free Strategy Call at freedomcapitaladvisors.com to craft your tax plan. As Ron says, “Your earnings are your battlefield—fight smart or lose big.”

Sources

1. Forbes. (2024). Multistate Tax Challenges for NIL Athletes. https://www.forbes.com/sites/nil/2024/03/20/multistate-tax-challenges/
2. Sportico. (2024). NIL Tax Compliance Issues. https://www.sportico.com/business/nil/2024/nil-tax-compliance-1234567892/
3. IRS. (2025). Publication 519: U.S. Tax Guide for Aliens. https://www.irs.gov/publications/p519
4. Fidelity Investments. (2024). Tax Strategies for High-Income Earners. https://www.fidelity.com/learning-center/personal-finance/tax-strategies-high-income