NIL Income Tax Strategies Every College Athlete and Influencer Should Know for 2025
- Aureus Advisory Partners
- Oct 28
- 4 min read
Updated: 7 days ago
NIL money has changed the game for athletes and influencers across the country. For the first time, college players can earn real income from their name, image, and likeness. But there is one thing most people forget to mention: the IRS wants its share.
Whether your NIL money comes from brand deals, appearances, merchandise, or social media sponsorships, it is taxable income. That means you are officially in business, and smart planning can save you thousands.
Here is a clear breakdown of how to handle your NIL income like a pro and build a strategy that protects your money, not just your image.
1. Understand What NIL Income Really Means
When you earn NIL money, you are not an employee of your school or the brand. You are considered self-employed. That means you are responsible for reporting your income and paying your own taxes.
If you made $10,000 or more this year through NIL deals, you will likely receive a Form 1099-NEC from the brands that paid you. That form reports your income to the IRS, and it must be included on your tax return.
💡 Aureus Tip: Keep copies of every contract, payment statement, and W-9 form you sign. Missing documentation is one of the fastest ways to get behind with taxes.
2. The 1099 Trap: Why Many NIL Earners Owe at Tax Time
Unlike a paycheck from a job, 1099 income has no taxes withheld. That means when you get paid $5,000 from a brand deal, the full $5,000 hits your account, but the IRS still expects you to set aside a portion for taxes.
If you do not plan ahead, your first tax bill can be a shock.
To stay compliant, you should make quarterly estimated tax payments to the IRS:
April 15
June 15
September 15
January 15 of the following year
💡 Aureus Tip: A good rule of thumb is to set aside 25% to 30% of every NIL payment in a separate savings account for taxes.
3. Form an LLC or S-Corp for Your NIL Income
Once you start earning consistent NIL money, it may make sense to form a legal entity.
LLC: Great for liability protection and separating personal and business finances.
S-Corp: Adds an extra layer of tax savings by allowing you to split income between salary and distributions.
This can reduce self-employment tax, help you qualify for the Qualified Business Income (QBI) deduction, and make it easier to claim business deductions for legitimate expenses.
💡 Aureus Tip: Do not form an S-Corp too early. Wait until your NIL income is stable enough to pay yourself a reasonable salary through payroll.
If you are ready to set up your LLC or S-Corp, Aureus can handle the full formation and registration process for you.
4. Track Every Expense; Deductions Are Your Best Friend
As a business owner, you can deduct ordinary and necessary expenses related to your NIL activity. Every dollar you deduct reduces your taxable income.
Common deductions for athletes and influencers include:
Training, coaching, gym fees, and nutrition programs
Camera equipment, lighting, and editing software
Travel and lodging for appearances
Website design, branding, and logo creation
Business phone, laptop, or tablet used for content
Marketing, photography, and social media ads
💡 Aureus Tip: Use an app like Double or QuickBooks Online to automatically track and categorize expenses. It is much easier to prove a deduction when every receipt is documented.
5. Separate Business and Personal Finances
Mixing business and personal money is one of the biggest red flags for the IRS. Always open a business checking account and business credit card to keep your NIL income cleanly separated.
Deposit every NIL payment into your business account and pay expenses directly from it. This makes tax filing and bookkeeping simple, and it shows the IRS you are treating your NIL activity like a real business.
💡 Aureus Tip: Linking your bank accounts to QuickBooks or Double will automatically track your business transactions and help you stay audit-ready all year.
6. Take Advantage of Retirement Accounts
Yes, college athletes and influencers can save for retirement too. You can contribute to a Solo 401(k) or SEP IRA once your business is established.
Both accounts allow you to deduct contributions from your taxable income while saving for your future. For 2025, you can contribute up to $69,000 depending on your income and age.
💡 Aureus Tip: If you are self-employed and ready to open a retirement plan, check out our partners at Rocket Dollar for flexible options designed for business owners.
7. Hire a Tax Strategist, Not Just a Preparer
A tax preparer files your return. A tax strategist designs your plan.
Most NIL earners make the mistake of only thinking about taxes when it is time to file. By then, the damage is done. Working with a strategist helps you structure your income, plan deductions, and make quarterly payments correctly so you never get caught off guard.
💡 Aureus Tip: At Aureus, we specialize in helping high-income earners and NIL athletes turn their income into strategy, not stress.
8. Action Plan: What to Do Before Tax Season
To get ahead of your 2025 tax obligations, take these steps now:
Gather all 1099s, contracts, and payment records.
Reconcile your income through QuickBooks.
Open a business checking account and track expenses.
Estimate your total earnings and make your final 2025 tax payment by January 15, 2026.
Schedule a consultation to create a tax plan for next year.
💡 Aureus Tip: Once your NIL income becomes consistent, you are no longer just a college athlete. You are a brand, a business, and a taxpayer. Treat it like one.
Final Takeaway
Earning NIL income is an incredible opportunity, but it also comes with new responsibilities. The athletes and influencers who win long-term are the ones who manage their money wisely and plan ahead for taxes.
You worked hard to build your name. Now make sure your tax strategy works just as hard for you.
Ready to Take Action?
If you are earning NIL income and want to make sure you are protecting every dollar, schedule a strategy session at aureusadv.com.
Or explore tools that simplify your financial setup: