A college QB with $1M in NIL deals could owe $325K in taxes—and most have $0 saved.
When you sign with a team, taxes are automatically withheld from your paycheck (W-2 income). You get paid, taxes come out, and you're mostly square with the IRS.
When you sign an endorsement deal or receive NIL payments, nothing is withheld. You get the full amount. The IRS still wants their cut—you just haven't paid it yet.
This is called 1099 income, and it's treated completely differently than your playing salary.
Here's what most athletes don't understand: endorsement income isn't just taxed at your income tax rate. You also owe self-employment tax.
So if you sign a $100K NIL deal, you don't get to keep $100K. You owe approximately $37-45K in taxes.
The IRS doesn't wait until April 15th to collect taxes on 1099 income. They want it quarterly.
Payment deadlines:
If you don't pay quarterly, you'll owe penalties and interest on top of your tax bill. This can add thousands of dollars to what you owe.
If you're a professional athlete, you don't just file taxes in your home state. You owe taxes in every state you play or work in.
This is called the "jock tax," and it means:
Each state has different rules, rates, and filing requirements. This is why professional athletes need CPAs who specialize in multi-state tax filings.
You didn't get paid cash, so it's not taxable, right? Wrong.
If a brand gives you:
The IRS taxes non-cash compensation at full market value. You get a tax bill for money you never actually received.
Here's something that changed in 2017 (and may change again in 2026): W-2 employees can no longer deduct unreimbursed business expenses.
What this means for professional athletes:
However, if you're receiving 1099 income (endorsements, NIL, appearance fees), you can deduct business expenses related to that income.
Simple rule: Set aside 40-45% of EVERY endorsement payment immediately.
Open a separate savings account. When you get paid $100K, transfer $40-45K to that account and don't touch it until taxes are due.
If you set aside too much, great—you get a refund. If you set aside too little, you're scrambling to find money you already spent.
Endorsement income comes on different forms:
You should receive these by January 31st for the previous tax year. If you don't receive a 1099 but got paid, you still owe taxes—the IRS knows about the income even if you didn't get the form.
If you're making endorsement income, you need a CPA who specializes in athlete taxes. Not your uncle who does taxes on the side. Not TurboTax.
Look for a CPA who:
A good CPA will save you more money than they cost.
Where you live matters. A lot.
Living in these states means you only pay federal taxes on your resident income. You'll still owe state taxes in states where you play away games, but your home income is protected.
Athletes in these states pay significantly more in taxes. A $1M contract in California vs Florida could mean a $130K+ difference in take-home pay.
Before you agree to any endorsement deal, know what your platform is actually worth. Our calculator helps you understand market rates so you can negotiate from strength—and set aside the right amount for taxes.
Calculate Your ValueEndorsement income is amazing—but only if you plan for the tax bill. Set aside 40-45% immediately, pay quarterly, and hire a CPA who knows athlete taxes. The IRS doesn't care that you didn't know the rules.