NIL Tax Resources

Yes, 100% of NIL income is taxable. This includes cash payments, products, services, and any other form of compensation. There are no tax exemptions for NIL income—it's treated like any other self-employment income by the IRS.

If you expect to owe $1,000 or more in taxes, the IRS requires you to make quarterly estimated tax payments. These are due April 15, June 15, September 15, and January 15. Missing these payments can result in penalties and interest.

Self-employment tax is 15.3% (12.4% for Social Security and 2.9% for Medicare). Most athletes receive NIL income as independent contractors, not employees, so you're responsible for both the employer and employee portions of these taxes.

You can deduct ordinary and necessary business expenses related to your NIL activities: travel to appearances, marketing costs, agent fees, accountant fees, equipment, website costs, business meals (50%), and mileage (67¢ per mile in 2024). Keep detailed records and receipts!

Yes, NIL income must be reported on your FAFSA and can reduce need-based aid like Pell Grants. However, it does NOT affect your athletic scholarship. The impact varies by school and your total family financial situation.

It depends on whether you provide more than half your own support. If your NIL income is substantial and covers most of your expenses, you may no longer qualify as a dependent. This decision impacts both your taxes and your parents' taxes, so plan carefully.

If you earn NIL income in multiple states, you may need to file returns in each state where you earned income, plus your home state. This can get complex quickly—especially if you travel for games, appearances, or camps. Professional help is highly recommended.

You're still required to report ALL income, even if you don't receive a 1099. Companies are only required to issue 1099s if they pay you $600 or more, but smaller payments are still taxable. Keep your own records of every payment.

If you're earning significant NIL income (typically $50,000+), an S-Corp can save you thousands in self-employment taxes. An LLC provides liability protection. However, these entities require setup costs, ongoing compliance, and professional guidance. We can help you determine if it makes sense for your situation.

Not necessarily, but it can save you money if you're earning $50,000+ in NIL income. An S-Corp can reduce self-employment tax, and an LLC provides liability protection. We'll help you determine if entity formation makes sense for your situation.

Free products are taxable at their fair market value. If you receive $2,000 worth of shoes and apparel, you owe taxes on $2,000 of income—even though you didn't receive cash. You should still set aside money for taxes on non-cash compensation.

You should work with a tax professional if you: earn more than $10,000 in NIL income, earn income in multiple states, receive an IRS notice, have complex deductions, or want to optimize your tax strategy. Professional help is an investment that usually saves you more than it costs.