If you’re making consistent money through NIL, you need to see start thinking of yourself as a business. And just like any business, you need to be thinking about tax compliance, documentation, risk, and mitigation.
We’ve all seen the long list of athletes and entertainers who ran into civil or criminal tax issues. It doesn’t take much to end up on the wrong side of that list.
And let’s be honest…
“I didn’t know I had to pay taxes” or “I forgot” is not an acceptable answer for the IRS or any state taxing authority.
Things to be aware of:
You’re a Business – NIL income is self‑employment income. That means you’re responsible for tracking it, reporting it, and paying taxes on it.
IRS Expectations – the IRS expects accuracy and compliance. “I didn’t know” won’t save you from penalties, interest. The IRS doesn’t play about the money!
Multiple Income Streams – Camps, sponsorships, appearances, social media, brand deals, each one is its own income source. You need to track them accurately and separately. You should have an efficient way to track and categorize all NIL deals.
Documentation Matters – keep receipts! no receipts, no deductions. If you can’t prove it, you can’t claim it. Simple as that. Say yes to the receipt!
Businesses keep records, tax plan, and stay compliant. Student-athletes earning NIL money need to do the same. This is an area that I would recommend consulting with a CPA, tax advisor, or attorney. Accurate record keeping and work papers is a must if you want to grow your brand into a scalable business.
