Expanding Their Role in Your Success

For many student-athletes, the NIL era is their first real experience with contracts, income, and business opportunities. It’s exciting—but also overwhelming. Suddenly, you’re not just an athlete, you’re a business owner. That raises big questions: How do you handle taxes? Should you form an LLC or another business entity? Who can you trust for guidance?

While NIL attorneys are best known for reviewing contracts and ensuring compliance with NCAA and state rules, their role often expands into helping athletes understand taxes and business formation. Here’s how they fit into the bigger picture.

The Tax Challenge for Athletes

NIL income is not like a paycheck from a part-time job. In most cases, it’s treated as self-employment income. That means:

• Companies paying you may not withhold taxes.
• You’ll likely owe quarterly estimated tax payments to the IRS.
• You may face self-employment taxes for Social Security and Medicare (around 15.3%).
• Different states may tax NIL income differently, especially if deals cross state lines.

An NIL attorney is not the same as a CPA, but they can:

• Explain the legal obligations that come with self-employment.
• Identify when an athlete should work with a tax professional.
• Help structure contracts to reduce unnecessary tax exposure.

Business Formation: Protecting the Athlete

Many athletes ask if they should form an LLC or another business entity to manage NIL income. The answer depends on the size of their deals and long-term goals.

An NIL attorney can guide athletes by:

• Explaining legal protections: Forming an LLC can shield personal assets from liability.
• Advising on ownership and structure: Should it be a sole proprietorship, LLC, or S-corporation?
• Drafting operating agreements: For athletes who want to collaborate with family members or partners.
• Ensuring compliance: Making sure business structures align with NCAA, state, and university NIL policies.

Attorneys don’t just protect athletes from unfair contracts—they help them set up the legal foundation to run their personal brand as a real business.

Building a Team: Attorneys, CPAs, and Advisors

It’s important to understand that while attorneys play a crucial role, they aren’t tax preparers or financial planners. Instead, the best attorneys coordinate with CPAs and financial advisors to create a full support team.

• The attorney protects you legally and ensures compliance.
• The CPA helps file taxes correctly and take advantage of deductions.
• The financial advisor helps manage and grow your earnings responsibly.

Together, this team approach ensures athletes aren’t just making money—they’re keeping it, protecting it, and building a future with it.

The Bottom Line

Yes, NIL attorneys can play an important role in taxes and business formation. While they aren’t accountants, they provide the legal foundation for athletes to operate as businesses, protect their personal assets, and avoid compliance pitfalls.

For athletes earning NIL income, working with an attorney is not just about contracts—it’s about building a structure for long-term success.