Two Different Tax Forms, Two Different Income Types
Most pro athletes get both a W-2 and one or more 1099s in the same year, because the money comes from two different relationships.
Your team salary, including most signing bonuses paid through payroll, is employment income. Your team withholds federal income tax, state and local tax for every jurisdiction where you played (the "jock tax"), and FICA, then sends you a W-2 by January 31.
Everything you earn outside the team contract is usually independent contractor income. That includes:
- Endorsement and sponsorship deals
- Appearance fees, speaking gigs, and camps
- Autograph and memorabilia signings
- NIL payments (college athletes) or licensing deals
- Podcast, media, or content income
- Royalties from a shoe or apparel deal above $10 in a year
Companies and collectives that pay you $600 or more for this kind of work in a calendar year are required to send you a Form 1099-NEC by January 31. If you got paid through a payment app or marketplace (Venmo, PayPal, a NIL collective's payment platform), you might instead get a Form 1099-K once volume crosses the current-year reporting threshold, even if the individual payments were smaller.
Why This Split Matters for Your Tax Bill
1099 income has no automatic withholding. Nobody is taking taxes out of that $50,000 appearance fee or that six-figure shoe deal before it hits your account. That money is subject to both income tax and self-employment tax (15.3% on net earnings, reported on Schedule SE), on top of whatever your marginal rate is. A lot of athletes get blindsided in year two when they realize the 1099 checks they spent were supposed to fund a tax payment.
Because there is no withholding, the IRS expects you to make quarterly estimated payments using Form 1040-ES if you expect to owe $1,000 or more from this income. Missing those deadlines (mid-April, mid-June, mid-September, mid-January) triggers an underpayment penalty even if you pay in full by the filing deadline.
This 1099 income also goes on Schedule C, where you can deduct real business expenses: agent and advisor fees, travel to appearances, training and equipment tied to endorsement obligations, a home office used for business calls, and marketing costs. Unmanaged, these deductions get missed entirely, or worse, agent and advisor fees get paid but never tracked against the income they helped generate.
What to Do When the Forms Arrive
Don't assume a missing 1099 means the income doesn't count. You owe tax on all your income whether or not a form was issued, including cash appearance fees and NIL barter deals (free gear, trips) valued at fair market value.
Match every 1099-NEC and 1099-K against your own records before filing. Payers make mistakes, and duplicate or inflated 1099-K amounts from payment platforms are common when the same income also appears on a 1099-NEC.
Keep 1099 income and expenses separate from your team paycheck in your own books. Combining a multi-state W-2 with several 1099s, all with different withholding and deduction rules, is exactly the kind of situation where a generalist preparer misses money, whether that's an overpaid jock tax state, a missed Schedule C deduction, or a quarterly payment that should have been smaller.