What Every Student-Athlete Needs to Know About NIL, Income, and Taxes Online
If you’re a student-athlete using social media to earn NIL income, congratulations—you’re not just building a following, you’re building a business. Whether you’re creating content for brands, promoting products, or earning from affiliate links, the IRS considers your activity income-generating—and that means it’s taxable.
This page breaks down how your social media presence ties directly into your taxes, what counts as income, and how to stay organized and compliant.
How Social Media Creates Taxable NIL Income
If you earn money or receive something of value in exchange for posts, mentions, or appearances online, it’s considered self-employment income by the IRS.
Here are some examples of taxable NIL income through social media:
- Sponsored Instagram, TikTok, or YouTube content
- Free gear or product in exchange for a post
- Affiliate marketing income from links or discount codes
- Payments through PayPal, Venmo, or direct deposit from a brand
- Paid collaborations with businesses or agencies
- Digital monetization platforms like Patreon, Cameo, or YouTube Ads
If you’re earning it online, the IRS expects it to be reported.
What Counts as Income?
| Social Media Activity | Is It Taxable? | Notes |
|---|---|---|
| Paid brand posts on TikTok or Instagram | Yes | Report total amount earned |
| Receiving free shoes or gear in exchange for a post | Yes | Fair market value must be reported as income |
| Affiliate link commissions | Yes | Even small payouts must be tracked |
| Reposting a product in exchange for discounts | Yes | If the discount has value, it’s considered income |
| Livestream donations or monetization | Yes | Platforms may issue tax forms if you earn enough |
Even if you don’t receive a 1099 form, you’re still required to report the income.
Organizing Social Media Income for Taxes
Here’s how to keep it clean and compliant:
- Track all income—even small payments, gift cards, or “free” products
- Keep screenshots of posts tied to each brand deal
- Save receipts for equipment, software, or promotional tools
- Use a spreadsheet or accounting app to log transactions
- Set aside 25%–35% of every payment for taxes
The more active you are on social media, the more critical it is to run it like a business.
Deductible Expenses for Social Media Creators
If your social media work is part of your NIL strategy, certain expenses may be deductible:
- Video or photo editing software
- Cameras, microphones, ring lights, and tripods
- Paid promotion and ad spend
- Travel related to content creation or collaborations
- Home office setup or workspace if used exclusively for NIL content
- Phone and internet (partial deduction based on business use)
To deduct these, keep receipts and be prepared to show how they relate to your NIL income.
Red Flags to Avoid
- Not reporting gifted items or free products
- Failing to track small earnings from affiliate links
- Mixing personal and NIL income in the same bank account
- Letting friends or managers run deals without contracts
- Thinking a small following means “the IRS won’t notice”
Remember: the IRS doesn’t care how big your audience is—they care whether you’re reporting income honestly.
Do You Need a Business Account for Social Media?
If your NIL earnings through social media are consistent or growing, it may be time to:
- Open a dedicated business checking account
- Consider forming an LLC or S-Corp for liability protection
- Register with your state, if required
- Work with a tax professional who understands creator income
Even if you’re just getting started, separating your finances now can save you stress later.
How to File Social Media Income
You’ll typically report this income on:
- IRS Form 1040
- Schedule C (Profit or Loss from Business)
- Schedule SE (Self-Employment Tax)
If you receive over $600 from a company, they may send you a 1099-NEC. Even if you don’t receive a form, you are still legally required to report all income.
You may also owe:
- Quarterly estimated taxes
- Self-employment taxes
- State income taxes, if applicable
Summary: Social Media and NIL Taxes
| Task | Action Step |
|---|---|
| Track your income | Use a spreadsheet or accounting app |
| Record all expenses | Save receipts and note the business purpose |
| Separate NIL money from personal use | Use a dedicated bank account |
| Save for taxes | Reserve 25%–35% of each payment |
| Get help when needed | Work with a tax pro who understands digital creators |
Final Thought
Your social media presence is powerful. It’s a platform for self-expression, business, and brand-building—but it’s also a source of income the IRS expects you to track and report.
Being smart about your content, contracts, and cash flow now means keeping more of what you earn, staying out of trouble, and building something sustainable—on and off the field.
If you need help managing taxes related to social media and NIL, check our directory for professionals who specialize in helping student-athletes just like you.