Insights · NIL
Nobody withholds tax from NIL pay, so the IRS expects you to pay four times a year. Here's how much, when, and how to skip the penalty.
Insights
You need to make estimated payments if you expect to owe at least $1,000 in federal tax for the year after withholding and credits. For NIL that's most athletes past a few small deals: self-employment tax alone is 15.3% of 92.35% of your net earnings, so about $7,000 of NIL profit already puts you near $1,000.
Insights
The periods aren't equal quarters, and the second one is only two months. You can skip the January payment if you file your 2026 return by February 1, 2027 and pay everything you owe with it.
Insights
The simplest safe amount is based on last year: pay 100% of last year's total tax, split into four payments, and you owe no penalty however much you earn this year. If last year's adjusted gross income was over $150,000, it's 110%. The other way to be safe is paying 90% of this year's tax.
Insights
NIL income often lands in bursts: a big deal in September, nothing in spring. You don't have to pay equal amounts if your income wasn't equal. The annualized income method lets you match each payment to what you actually earned in that period; you show it on Form 2210 when you file.
Insights
Pay the IRS online through IRS Direct Pay or your IRS online account, or by mail with a Form 1040-ES voucher. Keep the confirmation: you'll list the total you paid on your return.