I know it sucks when you land a big NIL deal but remember you still have to pay federal and state taxes. And self employment tax.
The tax nobody talks about, self-employment tax can significantly impact an athlete’s tax liability. When you earn NIL income, the IRS doesn\u2019t just see you as a student\u2011athlete.
They see you as a self\u2011employed independent contractor. Therefore you pay self-employment tax.
Athletes, this is what you should be aware of:
The $400 threshold – if an athlete earns a net income of at least $400 a year, then the athlete\u2019s net earnings are subject to self-employment tax.
Self-employment tax rate – as of 2025, the self-employment tax rate is 15.3%, consisting of 12.4% for Social Security and 2.9% for Medicare.
Independent Contractor Status \u2013 majority of NIL deals treat you as a 1099 contractor. That means no withholding, no payroll taxes taken out, and no one doing it for you. It\u2019s all on you.
Income + Self\u2011Employment Tax \u2013 NIL money is not what you think. Income and state taxes are separate from self-employment taxes. Unfortunately, you owe BOTH. You could owe other taxes as well.
There are ways to mitigate a big self-employment tax bill, but that comes with tax planning. Don\u2019t forget about the \u201cother\u201d taxes associated with self-employment. This is an area that all athletes should be consulting with a tax advisor or attorney.<\/p>","protected":false},"excerpt":{"rendered":"
I know it sucks when you land a big NIL deal but remember you still have to pay federal and state taxes. And self employment tax. The tax nobody talks about, self-employment tax can significantly impact an athlete’s tax liability. When you earn NIL income, the IRS doesn\u2019t just see you as a student\u2011athlete.They see […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"off","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[10],"tags":[],"class_list":["post-285","post","type-post","status-publish","format-standard","hentry","category-nil-tax"],"yoast_head":"\n