Taxes and What to Expect

Jesstine Kemper |

NIL Income Is Self-Employment Income

The moment you sign a NIL contract, you are a self-employed business owner. That means no employer is withholding taxes for you. Every dollar comes in gross, and it's your responsibility to set aside what you owe.

Most athletes find this out the hard way when their first tax bill arrives.

The Tax Bills You Need to Know

1. Self-Employment Tax: 15.3%

This is the one that blindsides athletes the most. Self-employment tax covers Social Security and Medicare contributions — taxes that W-2 employees split with their employer. When you're self-employed, you pay both sides yourself.

On a $100,000 NIL check, that's roughly $14,100 owed to the IRS before you account for a single dollar of income tax.

2. Federal Income Tax

After your standard deduction and the deduction for half of your self-employment tax, your federal income tax on $100K of NIL income is roughly $12,500, depending on your situation.

Combined, you're looking at approximately $26,600 in federal taxes on a $100,000 NIL check — before state taxes.

What You Actually Keep

Here's a realistic breakdown on $100K:

  • Self-Employment Tax: ~$14,100
  • Federal Income Tax: ~$12,500
  • State Tax (varies): ~$6,000
  • Your take-home: ~$67,400

This is an estimate. Your actual number depends on your state, deductions, and how your business is structured.

Quarterly Taxes: The Rule Nobody Explains

Because no one is withholding taxes for you, the IRS expects you to pay as you go — four times per year. These are called estimated quarterly tax payments, and the deadlines are:

  • January 15
  • April 15
  • June 15
  • September 15

Missing these deadlines triggers penalties, even if you pay everything in full in April. This catches athletes off guard more than almost anything else.

The Simple Fix: Set Aside 30%–40% Immediately

The moment NIL money hits your account, move 30%–40% to a separate account and don't touch it. That's your tax reserve. Every quarter, you pay from that account. You never have to scramble, and you never get surprised. If your tax bill comes back lower than what you have set aside, you can either invest it or spend it. 

Can I Reduce My Tax Bill?

Yes, if you structure things correctly. Setting up an LLC and electing S-Corporation status can reduce your self-employment tax exposure. A Solo 401(k) lets you deduct up to $72,000 per year (2026 number, changes annually) from your taxable income. Business deductions for equipment, content creation, and professional services reduce your taxable income further.

The athletes who come out ahead aren't the ones who earned the most — they're the ones who planned.

Work With Someone Who Knows NIL

Tax strategy for NIL athletes is different from standard personal tax planning. You need someone who understands self-employment income, quarterly payments, entity structure, and NIL-specific deductions — before the money arrives, not after.

Book a free call with IroncladNIL → ironcladnil.com 

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Investment advisory services offered through Mutual Advisors LLC DBA IroncladNIL, an SEC registered investment adviser. Securities offered through Mutual Securities, Inc., Member FINRA/SIPC. Mutual Securities, Inc. and Mutual Advisors, LLC are affiliated companies. IroncladNIL, nor any of its members, are tax accountants or legal attorneys, and do not provide tax or legal advice. For advice tailored to your situation, please consult your tax or legal professional.