Echelon Sports & Wealth

NIL stands for Name, Image, and Likeness. Since the NCAA’s policy change in 2021, college athletes have been allowed to earn income from endorsements, appearances, social media, and merchandise. NIL income is classified as self-employment income. It is subject to federal income tax at your marginal rate plus self-employment tax of 15.3% on net earnings up to the Social Security wage base. Athletes who earn significant NIL income need to make quarterly estimated tax payments to avoid IRS underpayment penalties.

For athletes earning above approximately $40,000 to $50,000 in NIL income, an S-corp structure can reduce self-employment tax meaningfully. The S-corp pays the athlete a reasonable salary subject to employment taxes. Remaining profits are distributed as dividends, which are not subject to self-employment tax. An LLC is simpler to set up and provides liability protection but does not reduce self-employment tax by itself.

Yes, and we encourage it. Athletes earning meaningful NIL income have a significant advantage: they are generating income at an age when long-term investments have the most time to compound. Contributing to a Roth IRA from NIL income is available to anyone with earned income and puts tax-free compound growth to work from an early age.

As a self-employed individual, a NIL athlete can deduct ordinary and necessary business expenses against their NIL income. These include agent and advisor fees, equipment used for content creation, travel to appearances and brand events, professional photography and videography, and business meals related to NIL activities. Personal expenses and general clothing are not deductible.

Multiple NIL deals mean multiple income sources, potentially with different payment schedules and 1099 reporting requirements. The key is a system: a separate business bank account for NIL income, organized records of income and expenses, and a clear process for setting aside taxes as income arrives. We set this up for clients so that managing multiple deals does not become a disorganized tax problem at year end.

The transition to professional athletics significantly changes the financial picture: income levels, contract structure, guaranteed versus non-guaranteed money, signing bonuses, and state tax exposure from playing in multiple states all become relevant. We build financial plans that account for the professional transition and the reality of a career that may end abruptly.

Yes. For athletes who have strong prospects and are planning ahead, early conversations about financial literacy, what NIL income will mean practically, and how to set up correctly from the start are valuable. We work with athletes and their families at the planning stage.

Echelon Sports & Wealth is the athlete-specific arm of Weston Banks. Standard financial advisors often lack experience with NIL income, self-employment tax for athletes, S-corp structuring at low income thresholds, or the specific planning needs of a career with a defined and potentially short timeline. Echelon advisors understand the NIL landscape and the financial decisions specific to college athletes.

There is no hard minimum. Athletes with modest NIL income still benefit from the tax structure setup, basic investment habits, and financial literacy Echelon provides. Athletes with higher NIL income have more urgent needs around entity structure, tax management, and investment planning. We assess each situation and are direct about whether full advisory services are the right fit.

The best first step is a free consultation. You can book through the Echelon website or through westonbanks.com, or call us at 919-783-8500. We recommend that a parent or guardian attend the first meeting for college athletes. Bring any existing NIL contracts and a sense of expected income for the current year.