A few years ago, a talented high school athlete signing with a Division I program had exactly one financial conversation to have: how to pay for college. Today, that same athlete might be fielding brand deals, social media sponsorships, and autograph-signing fees before they've even moved into the dorm.
Name, Image and Likeness (NIL) has changed the game both literally and financially. For North Central Washington families with a son or daughter headed into college athletics, NIL income can be an incredible opportunity. It can also be the first time a young adult (and their parents) are asked to make real decisions about taxes, contracts, and long-term savings. That's where a little preparation goes a long way.
What NIL Income Really Means
NIL deals allow college athletes to earn money from their name, image and likeness—think sponsorships, social media partnerships, personal appearances, and merchandise. But here's the piece that catches families off guard: this is self-employment income. There's no employer withholding taxes, no automatic paycheck deductions, and often no one sitting the athlete down to explain what happens on April 15th.
That means an 18- or 19-year-old, sometimes for the first time in their life, is responsible for:
- Tracking and reporting income from multiple sources
- Understanding self-employment tax obligations
- Setting money aside for quarterly estimated tax payments
- Deciding whether a formal business structure makes sense
- Protecting and growing what they earn for the years after eligibility ends
That's a lot to hand to a young person alongside a full course load and a training schedule. It's also exactly the kind of full financial picture we love helping families navigate.
Where We See Families Get Started
Every athlete's situation looks different, but a few conversations tend to come up again and again:
Taxes, before they're a surprise. NIL income is generally taxed as self-employment income, which means both income tax and self-employment tax can apply. Setting aside a percentage of every payment (before it's spent!) and making quarterly estimated payments can prevent a stressful tax bill down the road.
Business structure. Depending on the volume and nature of NIL activity, forming an LLC or S-corp may offer tax advantages and a layer of liability protection. This isn't a decision to make alone; it's one we walk through together with the family's CPA and financial advisor in the same room, looking at the full picture.
Record-keeping habits that last a lifetime. Simple systems such as a separate bank account, saved receipts, and basic spreadsheets can build financial discipline that serves an athlete well beyond their playing days.
Saving and investing early. For many young athletes, NIL income is the first real money they've ever earned. Guiding that first dollar into good habits like an emergency fund, a Roth IRA, or savings contributions for future goals can set the tone for a lifetime of financial confidence.
Protecting the athlete and the family. Contracts should be reviewed before they're signed. Insurance and liability questions deserve a second set of eyes. And parents often need just as much reassurance as the athlete does.
A Family Decision, Not Just a Financial One
What I appreciate most about these conversations is that they're rarely just about spreadsheets. They're about a family trying to do right by a kid who worked incredibly hard to earn this opportunity and wanting to make sure it becomes a foundation, not a footnote.
That's really the heart of tax-smart, values-based planning: helping people live out what matters most to them, whether that's providing for a growing family, giving back to the community, or setting the next generation up to succeed. NIL just happens to be one of the newer ways that shows up on our desks.
If you have a student athlete heading off to compete (whether it's a Wildcat, a Cougar, a Husky, or somewhere further afield) and NIL opportunities are on the horizon, we'd love to help your family think it through. A short conversation now can save a lot of headaches later, and it's one more way our team gets to do what we do best: help people make confident, informed decisions about their financial future.