Do I need to pay quarterly taxes as an athlete?

Disclaimer: Disclaimer: This information is made available for educational purposes. It provides general information and is not intended to provide specific legal or financial advice. This information should not be used as a substitute for competent advice from a licensed expert in your jurisdiction.

Why do I need to pay quarterly taxes?

As a student-athlete doing NIL deals, you are responsible for paying your income taxes. You are required to pay estimated quarterly taxes if you expect to owe more than $1,000 in taxes for the year as a self-employed individual.

If you do not pay your estimated taxes on time, you may have to pay penalties and interest later. So. the more money you plan to make, the more important is is to pay quarterly taxes. Paying quarterly will help you avoid sending a giant check to the IRS on tax day!

When do I pay?

Each year, check for the exact quarterly tax due dates, and set calendar reminders to pay your taxes. Typical schedule:

	Quarter	Pay Taxes By…
Q1	January 1 – March 31	April 15
Q2	April 1 – May 31	June 15
Q3	June 1 – August 31	September 15
Q4	September 1 – Dec 31	January 15 next year

How much do I pay?

There are several different methods for estimating your quarterly taxes. You may want to use Form 1040-ES to help you determine how much you need to pay each quarter. Contact an accountant for personalized recommendations.

Two basic example methods for athletes doing NIL deals…

(Quarterly Revenue – Quarterly Expenses)*(Predicted % Tax Rate)
(Total 2023 predicted taxes)/4

Where do I pay?

The easiest way to pay your quarterly taxes is through irs.gov.

The first time you pay your taxes through irs.gov, you’ll need to create an account. To do so, have your drivers license/personal ID, social security number, and address information ready to go. The IRS will need to verify your ID, which can take up to 10 minutes. Then, you’ll be ready to enter your estimated taxes and choose a payment method and date.

You can even have your estimated taxes automatically deducted from your bank account.

What else do I need to know?

Here are some additional tips for paying quarterly taxes as an athlete doing NIL deals.

Start planning early. The earlier you start planning for your taxes, the easier it will be to stay on top of things.
Keep detailed records. Keep track of your income and expenses throughout the year so that you can accurately calculate your taxes.
Use a tax preparation software. Tax preparation software can help you calculate your taxes and file your annual return.
Get help from a tax professional. If you need help with your taxes, you can hire a tax professional to help you.

If you run your NIL deals through a single-member LLC, your business activities are taxed with your personal income tax, and quarterly taxes are important to consider. Income taxes are calculated based on your net income, which is your gross income minus your expenses.