If you are or were a college athlete who made money off your name, image, and likeness (NIL), you may be wondering what’s next on the tax front. 

The answer depends on which route you’re taking: are you going pro after graduation? Leaving sports behind but keeping your NIL earning potential open? Or completely pivoting to a corporate job?

Here’s what your taxes will look like in each scenario.

Going pro: earning NIL as a full-time athlete

If you’re going pro after college, congrats! The only bad news is, your taxes will get more complicated. But the good news is, you’ll probably have an agent to take care of all that, so you shouldn’t have to worry.

One thing you should consider as a professional athlete is getting personal liability protection. Talk to your agent about setting up a legal business entity, like an LLC or corporation, and hiring someone to manage your finances, taxes, marketing contracts, and brand.

Not going pro, but keeping NIL open

Not going pro? Even if you’re no longer playing sports after college, you can still earn NIL money. For example, you could help a local business promote their product and earn NIL money off that. 

But how would you report that money on your taxes?

Any NIL money you earn is considered self-employment income, and should be marked as such on your taxes, using Schedule C.

Here are a few things to keep in mind if you’re earning NIL money:

1. Read your contracts and research your partners carefully.

2. Carefully decide how you want to get paid, whether that’s via cash, Venmo, or some other option.

3. Pay quarterly estimated taxes if you expect to owe more than $1000 in federal taxes.

4. Keep good records of your NIL income and expenses so you can easily take advantage of any tax deductions. 

5. Consider setting up a separate business account for your NIL earnings.

Going corporate

If you’re pivoting into the corporate world after college, your taxes will likely get easier. If you’re not planning on going freelance or running your own business, you’ll probably be a W-2 employee. In that case, you won’t need to pay quarterly estimated taxes, nor will you need to keep painstaking records of all your business finances.

If you aren’t earning NIL or other self-employment income, you can say goodbye to Schedule C for good. Instead, your employer will send you a W-2 stating how much was withheld from your taxes during the year. When filing your return, this will help you figure out if you owe anything more in taxes, or if you’re owed a refund.