LIFESTYLE & TRAVEL

From Field to Finances: Tax Filing Tips for Student-Athletes

Student-athletes with NIL income face unique tax obligations. Keep detailed records, report all earnings, make estimated tax payments, and consult a tax professional. Proper tax management will help to ensure financial stability and compliance.

As a student-athlete, managing your taxes can be a complex task, especially with the rise of name, image and likeness (NIL) deals. Here are some essential tips to help you navigate your tax responsibilities throughout the year.

Understand Your Tax Obligations

What you earn from NIL deals is considered taxable income. You’ll need to report this income on your tax returns and may need to make estimated tax payments throughout the year to avoid penalties. When calculating your estimated tax for the current year, it may be helpful to use your income, deductions and credits from the previous year as a starting point.

Keep Detailed Records

Maintain thorough records of all your NIL income, no matter how big or small the deal. Any expenses incurred related to those earnings — most commonly mileage, airfare and lodging — should also be thoroughly documented. This will help you accurately report your income and claim deductions.

Consider Forming a Business Entity

Depending on the number of NIL deals you have, forming a legal business entity like an LLC or corporation might be beneficial. This can provide personal liability protection and potential tax deductions for qualified business expenses.

Review Self-Employment Tax Information

As a self-employed individual, you’ll be responsible for paying self-employment taxes, which include Social Security and Medicare taxes. The self-employment tax rate for 2025 is 15.3% (12.4% for Social Security and 2.9% for Medicare).

Consult a Tax Professional

Tax laws can be complex, especially when it comes to NIL income and self-employment. Consider consulting a tax professional who can provide personalized advice and help you navigate your tax obligations.

Look at Impact on Financial Aid

NIL income can affect your eligibility for need-based financial aid. Be sure to report your NIL income on your FAFSA and check with your school’s financial aid office for guidance.

Stay Informed

Tax laws and regulations can change, so it’s important to stay informed about any updates that may have an impact on your financial situation. Follow reliable sources and consult with professionals as needed.

By following these tips, you can better manage your taxes and self-employment responsibilities as a student-athlete. Taking proactive steps now will help set you up for financial success during and after your college years.

Sources:

https://www.investopedia.com/nil-deals-tax-implications-8599929

https://www.kiplinger.com/taxes/604955/tax-implications-when-ncaa-student-athletes-make-money#:~:text=All%20those%20forms%20of%20compensation,employed%20Internal%20Revenue%20Service%20guidelines.

https://blog.taxact.com/tax-tips-for-college-athletes/

Self-Employment Tax: Calculator, Rates - NerdWallet

https://teamworks.com/blog/admins-guide-to-nil-taxes/