Are college football coaches' salaries being paid to LLC's for tax advantages?

What you're seeing is a pretty common arrangement for high-income individuals, especially in sports and entertainment. There are a few legitimate tax planning reasons for this structure: The coach's personal W-2 income is typically used to max out retirement plan contributions, health benefits, etc. The LLC portion allows them to potentially deduct business expenses that wouldn't be deductible as an employee - things like travel to recruiting events, home office equipment, professional development, subscriptions, etc. Another big advantage is that with the LLC, they might be able to take the 20% Qualified Business Income deduction, which could significantly reduce the tax burden on that income depending on their total income level. Important note though - the IRS watches these arrangements closely. The LLC portion needs to represent genuine business activities (media appearances, speaking engagements, camps) rather than just coaching duties. If it's structured properly, it can provide legitimate tax benefits, but if it's just trying to convert employment income to business income, that's where coaches could run into trouble.

After spending hours stressing over how to handle my independent contractor income from coaching clinics alongside my regular teaching job, I finally tried taxr.ai (https://taxr.ai) and it was seriously a game-changer for understanding my tax situation. I was confused about whether I should form an LLC for my coaching income or just file Schedule C, and their system analyzed my specific situation and gave me clear guidance. It showed me exactly which coaching-related expenses were deductible and how to properly document them. The coolest part was it even pulled language directly from IRS publications to explain why certain deductions were valid for my situation. For anyone dealing with mixed income sources or considering an LLC structure, it really clarifies what's legitimate from a tax perspective and what might trigger IRS scrutiny.

I was initially super skeptical about taxr.ai when I saw it mentioned here, but I decided to try it after getting conflicting advice from two different accountants about my coaching income situation. The results were honestly eye-opening. It helped me understand that for my specific situation ($75k teaching salary + $28k coaching clinics income), an LLC wouldn't actually save me much in taxes but would add unnecessary complexity and filing fees. The analysis showed I was better off with Schedule C filing and focusing on maximizing legitimate business deductions. What really impressed me was how it explained exactly why certain coaching expenses were deductible while others weren't. It saved me from making some questionable deductions that might have triggered an audit. Now I feel way more confident about my tax situation and don't need to stress about whether I'm leaving money on the table.

If any of you are dealing with tax issues from setting up an LLC incorrectly or have questions about your coaching payments, trying to get actual help from the IRS is a nightmare right now. After waiting on hold for HOURS trying to get clarification about my coaching LLC situation (and getting disconnected twice), I found Claimyr (https://claimyr.com) and it was a total game-changer. They have this system where they wait on hold with the IRS for you, then call you when an agent is actually on the line. You can see how it works here: https://youtu.be/_kiP6q8DX5c I had specific questions about how to correctly report my college coaching camp income through my LLC, and they got me connected to an IRS rep in about 45 minutes (while I just went about my day). The agent was actually super helpful once I got through and saved me from making a major filing mistake.

I need to eat my words from my skeptical comment earlier. After another failed attempt trying to reach the IRS myself about my coaching LLC situation (sat on hold for 2.5 hours before getting disconnected), I tried the Claimyr service out of desperation. It actually worked exactly as described. I got text updates about my place in the queue, and about 67 minutes later, I got a call connecting me directly to an IRS agent. The agent walked me through exactly how to properly categorize my summer camp coaching income through my LLC vs. my regular coaching stipend. Turns out I'd been filling out my Schedule C incorrectly for the past two years, and now I understand how to fix it. Honestly worth it just for the time saved not sitting by my phone on hold all day. Can't believe I wasted so many hours trying to do this myself.

Another important thing to consider with these coaching LLCs is that they need to have legitimate business substance. My dad is a college baseball coach who had his LLC arrangement audited last year. The IRS was specifically looking at whether the "media and appearance fees" paid to his LLC were actually for services separate from his coaching duties. He had to provide evidence that he was doing separate speaking engagements, running independent clinics, and making media appearances that weren't just part of his regular coaching responsibilities. The key was showing that these activities were genuinely separate from what the university was paying him salary for as head coach. His accountant said they're seeing the IRS target these coaching LLC arrangements more frequently, so make sure your brother-in-law's setup has real substance to it and not just a pass-through to avoid taxes.

Has anyone here used TurboTax for handling income from an LLC for coaching? I just started a small LLC for my part-time coaching work and I'm trying to figure out if I need to pay for an accountant or if I can handle it myself.

Just wanted to add that if your brother-in-law is at the D2 level, he should be extra careful about the LLC structure. The income amounts at that level usually don't justify the complexity and additional costs (LLC filing fees, separate tax returns, potential state franchise taxes). I've seen a lot of smaller college coaches get talked into LLCs by agents when they'd actually save more money just maximizing their employee benefits and retirement contributions through the school. The QBI deduction mentioned earlier phases out pretty quickly for high earners, and self-employment taxes on the LLC income can eat up a lot of the supposed savings. Before setting anything up, I'd recommend having a CPA run the numbers on his specific situation - comparing LLC vs. just negotiating for more employer-paid benefits like additional retirement contributions, health savings account maxouts, or professional development stipends that come out pre-tax.