Quarterly Taxes

What Every NIL-Earning Student-Athlete Needs to Know

When you earn NIL income, you’re officially self-employed—and that changes the way your taxes work. One of the biggest shifts is the expectation that you’ll pay taxes four times a year, not just once in April. These are called quarterly estimated tax payments—and missing them can lead to surprise bills, IRS penalties, and financial headaches.

This page will break down how quarterly taxes work, who needs to pay them, how to calculate them, and how to avoid common mistakes.

What Are Quarterly Taxes?

Quarterly taxes are estimated payments you send to the IRS throughout the year. Since most NIL income does not have taxes withheld (like a regular job does), the IRS expects you to pay your taxes as you go.

Instead of waiting until tax season, you pay taxes in four installments based on what you expect to earn during the year.

Quarterly Tax Due Dates

Note: If a due date falls on a weekend or holiday, the deadline moves to the next business day.

Do I Have to Pay Quarterly Taxes?

You are generally required to make quarterly payments if:

• You expect to owe at least $1,000 in federal income tax for the year, and
• Your income comes from self-employment, freelance work, or NIL-related activities where taxes weren’t withheld

For most student-athletes earning NIL income—especially if they receive multiple 1099-NEC forms or payments through apps like Venmo or PayPal—quarterly taxes are required.

How Much Should I Pay Each Quarter?

You must estimate your total income, deductions, and credits for the year, then divide your expected tax liability into four payments.

If you’re not sure, a safe rule of thumb is to:

• Set aside 25% to 35% of your NIL income
• Divide that amount equally into four payments

Chart: Sample Quarterly Tax Estimate

This chart assumes a 30% combined tax rate (federal income tax, self-employment tax, and possibly state tax).

How Do I Make Quarterly Payments?

You can pay online, by mail, or through your tax software. The easiest way is to use the IRS Direct Pay system or set up an IRS account.

You’ll need:

• Your Social Security Number
• A payment amount
• The correct tax year
• A reason for payment (usually “1040-ES Estimated Tax”)

Some states also require separate estimated payments. Don’t forget to check with your state’s department of revenue.

Penalties for Not Paying Quarterly Taxes

If you skip quarterly payments or underpay:

• The IRS may charge a penalty and interest
• You may owe more than expected at tax time
• You could trigger an audit or red flags

Even if you file your return on time, failing to pay quarterly can cost you.

Quarterly Taxes vs. Withholding

A traditional job with a W-2 automatically withholds taxes for you. With NIL income, no one is doing that—you are the employer and employee. That’s why the IRS expects you to stay current with quarterly payments.

Tips to Stay Organized

• Open a separate savings account just for tax money
• Set calendar reminders for each deadline
• Use accounting software or a spreadsheet to track income and payments
• Work with a tax professional to calculate payments accurately

What If I Missed a Payment?

Don’t panic—but act fast.

• Make the payment as soon as possible
• Pay the penalty amount once it’s calculated
• Adjust your next payment to stay on track
• Talk to a tax pro to help you catch up and minimize future penalties

Bottom Line

Quarterly taxes aren’t optional when you’re earning NIL money. Treat your NIL like a real business—because that’s exactly how the IRS sees it.

If you’re not sure how much to pay, or whether you need to pay at all, consult a qualified tax professional. Making a plan now can help you avoid stress, keep your money safe, and set yourself up for financial success long after the season ends.