FOR PRO ATHLETES

I Found a $61,000 Tax Mistake in a Rookie's Contract. A CPA for S Corp Fixed It in One Meeting.

("Save 30% And Hope" Is Not A Tax Plan)

A CPA for S corp structuring does one job for athletes: it splits endorsement income that would otherwise take full self-employment tax into a reasonable salary and a distribution, and keeps the difference in your account. If you earn real money on deals you win one at a time, here is the exact fix, and the rookie contract that proved it.

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Real accountants Flat monthly pricing Every sponsor W-9 checked

Phoenix · Updated September 24, 2026 · 6 min read

One rookie contract. Real numbers.

$61,000

owed in April that nobody had budgeted

“I'd had three different accountants in five years. None of them had ever run a reasonable-salary calculation or checked whose name my sponsors were actually paying. Amadae found $61,000 I didn't know I was overpaying, in the first review.”

Anonymized client · Pro athlete, rookie contract, 2024

Your biggest deal is not taxed like your game checks

Dana signed a two-year, $520,000 endorsement contract, the biggest of her rookie year, with a $60,000 signing payment the week she inked. Her lawyer reviewed the image-rights clauses. Nobody reviewed the payment terms. The agreement named Dana personally, not her S corp, so every payment ran through her SSN as sole proprietor income: full self-employment tax, no salary and distribution split. The following April she owed an extra $61,000 she had not budgeted.

Do this today: Before your next deal lands, check whose name and TIN are on the payment terms, the W-9, and the first payment. All three must be the entity.

Dana's endorsement deal, as the IRS saw it

Two-year endorsement contract, signed week one$520,000

Paid to her SSN as sole proprietorAll of it

S corp split actually applied$0

Extra owed the following April$61,000

Six sponsors. Six chances to get the paperwork wrong.

Most athletes assume the sponsor's accounts-payable team handles it. AP pays whatever name is on the W-9 they have, which is rarely checked after year one, and reconciling six sponsor files against one entity is not something a generalist preparer volunteers to do carefully. Every new deal needs the entity's name, EIN, and payment terms confirmed now, not reconstructed from memory in March.

Do this today: Start a sponsor file today: contract name, W-9 on file, TIN used, payment account. Keep it current through the year.

Woman working on a laptop from a sunny couch — Six active sponsors meant six W-9s on file, and three of them still pointed at her SSN.

Your agency fees cost more than the contract says

Dana ran two of her deals through an agency taking 15% plus a 3% payment processing fee, and nobody had cross-checked those statements against deliverables. Fees are also treated differently depending on how you are structured: cleanly deductible against entity income, messy or missed entirely when everything runs through a personal account with no books behind it.

Do this today: Pull 12 months of agency and processor statements and ask which fees are actually reducing your tax bill.

18%

of contract value going to agency and payment fees, never cross-checked against deliverables

Dana's statements: 15% agency fee plus 3% payment processing

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04AMADAE

What a CPA for S corp does with endorsement income

Endorsement fees, appearance fees, and royalties get routed through your entity with an S corp election behind it. You pay yourself a reasonable salary and take the rest as a distribution with no self-employment tax. On $220,000 of net endorsement income that split alone saves five figures a year. Dana kept an additional $34,000 in year one, on top of fixing the misrouted contract. If your net endorsement income is still modest, the payroll and filing costs of the election can eat the savings, so staying a sole proprietor with careful tracking is fine for now. Once it looks more like Dana's $220,000, the salary and distribution split starts saving real money every year the income repeats. Amadae handles the election, the reasonable-salary defense, the sponsor paperwork, and the books in one flat monthly price.

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Who handles what for an athlete

	Generalist preparer	The lawyer who did the LLC
S corp election and payroll		Extra fee
Reasonable-salary calculation that holds up
Every sponsor W-9 checked against the entity	Extra fee
Agency and processor fees audited annually
Estimate recalculated as each check lands
Flat monthly price

19 of 22 athletes left $31,000 on the table

Dana's story is the default, not the exception. We reviewed the returns of 22 six-figure athletes this year and 19 had left an average of $31,000 behind through structures exactly like hers: no entity behind the endorsement income, no salary calculation, no sponsor paperwork check. The three who were fine had one thing in common: someone who specialized in athlete income had walked them through it.

Do this today: Ask whoever does your taxes one question this week: if my biggest sponsor left tomorrow, would my tax structure still be working for me?

22 six-figure athletes reviewed this year

Left money on the table, avg $31,00019 athletes

Structured correctly3 athletes

Amadae athlete tax return reviews, this year

"I'm saving 30%" is a guess, and Q4 is spending season

Set aside 30%, maybe 35%, and hope it covers what is owed: that is the plan most athletes run on their endorsement money. A flat percentage does not flex when your bracket shifts with every appearance fee and signing payment, and the fourth quarter is when the offseason training block, the travel, and the holidays all land at once. A real quarterly estimate, recalculated as income arrives, is the difference between a plan and a guess.

Do this today: Before your next big purchase, get a real number for what you owe on income received this quarter.

Coffee at green desk — Peak playing years last a handful of seasons. That is the window to build wealth that has to last five decades.

BONUSAMADAE

Bonus: Fix it before the next deal, not after the next $61,000

Three accountants in five years and none of them had run a reasonable-salary calculation or read the payment terms in her contracts. That silence costs more than any agency fee. The structure Amadae builds keeps paying you back every year your income changes, every deal that lands, and every sponsor you add. The intro call is free and there is no long-term contract.

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Anonymized client

Pro athlete, rookie contract, 2024

Found $61,000 in the first review

One rookie contract. Real numbers.

$61,000

owed in April that nobody had budgeted

$34,000

kept in year one from the S corp split

active sponsors, three still paying her SSN

19 of 22

athletes reviewed had left money on the table

One client, anonymized, plus Amadae athlete return reviews this year. Your numbers will differ.

Accounting built for a career that runs on contracts

Books, payroll, and taxes from real accountants, for one flat monthly price starting at $249.

S corp election with a reasonable-salary defense
Every sponsor W-9 and contract checked against your entity
Quarterly estimates recalculated as each check lands
Agency and processor fees reviewed against your return

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No long-term contract. Cancel any time. The intro call is free.

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$249/mo

If you make $40K - $69K. Flat, no hourly bills.

Monthly profit and loss reports
Tax set-aside management
Expense categorization
Real-time financial dashboard
Business bank account connections
Individual tax return included*

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Flat monthly pricingReal accountantsTaxes filed for you

Straight answers

Questions creators ask us

My team salary is W-2. Can it go through an S corp?+

No. W-2 wages stay where they are. The election applies to endorsement fees, appearance fees, and royalties, which is where the $34,000 in Dana's case came from.

My lawyer set up my LLC. Isn't that enough?+

Formation is the start. Ask who ran a reasonable-salary calculation or checked whose name your sponsors actually pay. If the answer is nobody, that is the gap. Many athletes start with a review of last year's return and decide from there.

How fast can this be set up before my next deal?+

The election, payroll, and a sponsor file can be in place in weeks, not months. The sooner it is filed, the more of this year's income it protects.

Sources

IRS: S Corporations · IRS
IRS Form 2553, Election by a Small Business Corporation · IRS
SBA: Choose a Business Structure · U.S. Small Business Administration
IRS: Limited Liability Company (LLC) · IRS

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