NIL Taxes Education

NIL Taxes Education Curriculum

As student-athletes begin to earn income through NIL (Name, Image, and Likeness) deals, it’s essential they understand the tax implications of this new financial responsibility. Unlike traditional scholarships, NIL income is taxable, and failing to report it properly can lead to penalties, interest, or even legal trouble.

This curriculum is designed to help student-athletes grasp key tax concepts, stay compliant with IRS requirements, and plan wisely for the future. Through real-world scenarios and hands-on activities, athletes will learn how to manage their income, track expenses, and work with professionals to protect their finances.

Module 1: Introduction to Taxes and NIL

Learning Objectives:

  • Understand what constitutes NIL income

  • Learn why NIL earnings are subject to taxation

  • Identify the types of NIL compensation and how they’re taxed

Topics Covered:

  • What is NIL income? (cash payments, gifts, endorsements, services, barter deals)

  • Overview of taxable vs. non-taxable income

  • The IRS and student-athletes: understanding your tax obligations

Activities:

  • Quiz: Identify different NIL activities and whether they are taxable

  • Discussion: What happens if you don’t report your NIL income?

Module 2: Income Types and Tax Forms

Learning Objectives:

  • Identify the different tax forms athletes may receive (1099-NEC, W-2, etc.)

  • Understand self-employment income vs. employee income

  • Learn how to read and interpret tax documents

Topics Covered:

  • 1099-NEC: Independent contractor status for most NIL deals

  • W-2: Employee income (rare, but possible)

  • Cash apps and Venmo: Why payments here still count as income

Activities:

  • Tax Form Lab: Review sample 1099-NEC and identify key data points

  • Simulation: Classify NIL income received through various scenarios

Module 3: Deductions and Expenses

Learning Objectives:

  • Understand what expenses can be deducted from NIL income

  • Learn how to track and categorize business-related expenses

  • Explore tools to stay organized for tax season

Topics Covered:

  • Common deductible expenses: travel, meals, gear, phone, training

  • Receipts and record-keeping: why documentation matters

  • Business vs. personal expenses: drawing clear lines

Activities:

  • Deduction Matching Game: Match expenses to IRS-approved categories

  • Expense Tracking Sheet: Set up a digital or physical system to log NIL-related costs

Module 4: Estimated Taxes and Withholding

Learning Objectives:

  • Learn when and how to pay estimated taxes

  • Understand how to calculate quarterly payments

  • Discover how failing to pay can result in IRS penalties

Topics Covered:

  • Why athletes often need to pay taxes quarterly

  • How to calculate your estimated payments

  • Online tools and apps to help with estimated tax filing

Activities:

  • Estimated Tax Calculator: Use a worksheet to estimate your quarterly payments

  • Timeline Building: Mark tax deadlines and payment due dates on a calendar

Module 5: Working with Tax Professionals

Learning Objectives:

  • Know when and how to find a tax advisor or CPA

  • Understand what to bring to your first tax appointment

  • Learn the benefits of professional guidance vs. DIY filing

Topics Covered:

  • What to look for in a tax professional

  • Red flags: how to avoid tax scams and bad advice

  • Organizing your NIL financial records for tax season

Activities:

  • Role Play: Prepare a checklist of documents for a CPA meeting

  • Research Exercise: Compare tax software vs. hiring a professional

Module 6: Long-Term Tax Planning and Financial Literacy

Learning Objectives:

  • Understand how taxes affect long-term financial planning

  • Learn strategies to lower your tax liability legally

  • Explore saving for retirement and investing as a self-employed individual

Topics Covered:

  • Self-employment taxes and setting up an LLC (when applicable)

  • Roth IRAs and Solo 401(k)s: investing for the future

  • Creating a NIL-specific savings and tax withholding system

Activities:

  • Scenario Planning: What happens to your tax liability if you earn $5K vs. $50K?

  • Goal Setting: Map out a savings strategy for next year’s tax bill

By the End of This Curriculum…

Athletes will:

  • Know how to report NIL income properly

  • Be able to estimate and pay taxes on time

  • Understand deductions and how to organize finances

  • Feel confident about working with a CPA or tax professional

  • Build strong habits that will serve them well into their professional careers