Independent Contractor Archives

Getting Paid to Play College Sports: Compensation and Tax Implications

By Office Staff|2025-12-18T17:44:12-08:00December 18, 2025|Categories: Independent Contractor|Tags: College Athletes, Name Image Likeness, NIL, Student-Athlete|0 Comments

Student-athletes at American colleges and universities can now get paid for competing in sports (much like professional athletes), and they can earn additional income from the use of their name, image, and likeness (NIL).

An added bonus? They can enjoy all of these perks without suffering penalties for being paid to play. This change in rules has created a fast-growing market that includes brand endorsements, appearances, and income from untraditional sources, including participation in social media-related activities.

As NIL activities expand, businesses, collectives, and schools face important questions about taxes, worker classification, and compliance. The recent Grant House and Sedona Prince v. National Collegiate Athletic Association, et al. court case (aka the NCAA House settlement), which allows schools to pay athletes directly and allocates billions in “back pay,” raises the stakes for any businesses and brands that are involved with NIL deals.

Understanding NIL Collectives: Collectives are groups, usually formed by boosters or supporters of a college, that help student-athletes find and manage opportunities to earn money from their name, image, and likeness. Some collectives act like talent agents and simply connect athletes with companies that want to work with them. Others pay athletes directly for things like appearances or promotional work.

In this post, we explain what NIL is, how student-athletes are classified for tax purposes, the role that collectives play, and how the new rules affect businesses that engage student-athletes.

Giving Athletes the Rights to Their Personal and Professional Assets

The term “NIL rights” refers to a person’s right to control the commercial use of their identity, including their name, photos, likeness, gestures, or appearance. In practice, this means that all college athletes, not just football and basketball players, are allowed to earn money from the following: Continue reading… Continue reading… Continue reading…

Freelancers and Contractors Accepting PayPal, Venmo, and Crypto — What You Need to Know

By Office Staff|2022-01-25T16:18:08-08:00January 25, 2022|Categories: Business Advice, Independent Contractor|Tags: Cryptocurrency, IRS, PayPal, Venmo|0 Comments

We all accept the fact that each new year ushers in new or updated tax rules, regulations, deadlines, rates, and thresholds. However, changes for 2022 are most remarkable because of their impact on freelancers, independent contractors, and any business that accepts payment via an e-payment platform such as PayPal or Venmo.

Top among these changes affecting many of the above-mentioned freelancers, independent contractors, or businesses is the use of hard, soft, cold, hot, mobile, or digital wallets to accept payments available through cryptocurrencies, which are now perhaps stable enough for businesses to consider accepting.

In this post, we give you a heads up on what to expect in 2022 so you won’t be blindsided at any point during the year ahead. Below, we offer insights into each of the following changes for 2022:

New reporting rules for payment apps
What you need to know about accepting cryptocurrencies
Upcoming tax deadlines
Changes to the standard deduction
Marginal tax rates for 2022
Increase in the earned income tax credit

To avoid any unpleasant surprises at year’s end, now is the time to get up to speed on the key changes below and adjust your tax and financial planning accordingly.

New Reporting Rules for Payment Apps

To reduce the amount of unreported taxable income flowing through e-payment platforms such as PayPal, Venmo, and Cash App, the Internal Revenue Service (IRS) is requiring such platforms to report each user’s business transactions if they exceed $600 for the year for goods or services.

The prior threshold for reporting was 200 transactions per year or a combined total of at least Continue reading… Continue reading… Continue reading…

Employee or Independent Contractor? The Rule That Never Happened

By Office Staff|2021-07-21T16:07:15-07:00July 21, 2021|Categories: Independent Contractor|Tags: ABC Test, Economic Realities Test, Gig Worker, Independent Contractor, Worker Classification|0 Comments

The more things change, the more they remain the same. Case in point: the U.S. Department of Labor’s guidelines for determining whether someone is an employee or an independent contractor. In September 2020, the Department of Labor (DOL) proposed a rule to clarify employee and independent contractor status under the Fair Labor Standards Act. This rule would have made it easier for workers to be treated as independent contractors instead of as employees. It was scheduled to take effect on March 8, 2021.

In late January 2021, a new administration moved in at 1600 Pennsylvania Avenue NW in Washington, D.C., and delayed the new rule’s effective date. Then they officially withdrew the rule. You could call it “the rule that never happened.” Whether that’s good or bad depends on your circumstances, but withdrawing the rule hasn’t made it any easier to determine whether a worker should be classified as an employee or an independent contractor.

Making this determination has always been a challenge, and it continues to be so. And the fact that some states have their own rules doesn’t help matters in the least. In this post, we explain the rules and tests to shed some light on this perplexing topic.

Why the Distinction Matters

Worker classification has always been a hot-button issue. Pro-business administrations typically lean toward relaxing the rules, so that businesses have more leeway in determining how workers are classified. Some businesses prefer to use independent contractors because they facilitate scalability and generally cost less than employees. In addition, when they have more leeway in deciding who’s an employee and who’s an independent contractor, maintaining compliance with labor laws and tax laws is easier.

Pro-worker administrations, on the other hand prefer that businesses classify more workers as employees to ensure fair treatment, compensation, and benefits. When businesses have more leeway in deciding whether a worker is an employee or independent contractor, some businesses choose to hire fewer employees or even lay off employees or place them on contract (instead of hourly pay or salary) and eliminate their protections and benefits under the law.

The Biden administration would like to see more workers classified as employees and favors an ABC Worker Classification-type Test at the federal level like the test used in several states. However, to date, no federal rule or law has been adopted that requires an ABC test.

The Economic Realities Test

Currently, the DOL uses the economic realities test to classify workers. The economic realities test considers a variety of factors, including the following: Continue reading… Continue reading… Continue reading…