NIL Tax Planning Made Simple: Deadlines, Deductions, and How to Work With a CPA to Avoid Penalties

Earning NIL (Name, Image, and Likeness) income is exciting — but it also comes with a reality that many athletes overlook: taxes are now your responsibility. Unlike a part-time campus job where taxes are automatically withheld from your paycheck, NIL payments usually arrive without anything set aside for Uncle Sam.

If you don’t plan ahead, you could face unexpected bills, penalties, or even IRS trouble. The good news? With a little organization — and the right professional help — NIL taxes can be straightforward.

1. Know Your Tax Deadlines

When you earn NIL income, you’re essentially self-employed. That means you may need to pay quarterly estimated taxes instead of just filing once a year.

Key Deadlines for Quarterly Estimated Taxes:

  • April 15 – Income earned January–March

  • June 15 – Income earned April–May

  • September 15 – Income earned June–August

  • January 15 (following year) – Income earned September–December

Note: If the date falls on a weekend or holiday, the deadline moves to the next business day.

2. Set Aside Money for Taxes Every Time You Get Paid

Because taxes aren’t withheld from NIL income, you need to be proactive.

  • A good rule of thumb: Save 25–30% of every NIL payment in a separate “tax account.”

  • This covers federal income tax, state tax, and self-employment tax (Social Security and Medicare).

  • If you don’t owe as much as you’ve saved, you keep the extra — a lot better than scrambling to find cash at tax time.

3. Track Your Deductible Expenses

One of the benefits of being a self-employed NIL earner is that you can deduct certain business expenses, lowering your taxable income.

Common NIL deductions include:

  • Travel costs for appearances or events

  • Sports equipment and uniforms (if paid for yourself)

  • Marketing expenses (website, social media ads, graphic design)

  • Professional fees (agent, CPA, financial advisor)

  • Content creation tools (camera, lighting, editing software)

  • Home office expenses (if used exclusively for NIL work)

Tip: Keep receipts and maintain a simple spreadsheet or use an expense-tracking app.

4. Work With a CPA Who Understands NIL

Tax rules for athletes can get complex — especially if you earn money in multiple states or through different channels.

  • Look for a CPA or enrolled agent who has experience with self-employment and sports income.

  • Share all your NIL contracts, income statements, and expense records with them.

  • Ask them to walk you through potential deductions you might be missing.

  • Use them as a resource for avoiding underpayment penalties and ensuring your filings are correct.

5. Avoid Common NIL Tax Mistakes

  • Mistake #1: Spending all your income and forgetting about taxes.

  • Mistake #2: Not filing quarterly and getting hit with penalties.

  • Mistake #3: Failing to track expenses and missing out on deductions.

  • Mistake #4: Trying to DIY complicated tax situations without guidance.

The Bottom Line

NIL income is a huge opportunity — but mishandling taxes can turn that blessing into a headache. The smartest athletes treat tax planning as part of their overall financial game plan, not as an afterthought.

By knowing your deadlines, setting aside money, tracking deductions, and working with a knowledgeable CPA, you’ll avoid penalties and keep more of what you earn.

Ready to find a CPA who understands NIL? Search the NIL Financial Advisor Directory to connect with professionals who can help you file with confidence.