Because NIL income is business income on Schedule C, you get something regular students never do: the right to deduct the costs of earning it. But the line between a business expense and a personal one matters a lot here, because training sits right on top of it.
Ordinary and necessary, the Section 162 test
The tax code, in Section 162, lets a business deduct expenses that are ordinary and necessary for that business. For an NIL athlete, the business is monetizing your name, image, and likeness: posting content, making appearances, signing autographs, running camps. Expenses clearly tied to that activity are solid deductions. Agent and marketing fees. Travel to appearances and brand shoots. Cameras, lighting, and editing software for content. A percentage of your phone bill if you run your NIL business from it. Equipment bought specifically for sponsored content or camps you host.
The test to apply before deducting anything: would I have spent this money if the NIL business did not exist? If the honest answer is no, you have a business expense. If the honest answer is yes, keep reading.
Why your regular training is usually personal
Here is the uncomfortable part. Your sport training, gym memberships, supplements, and physical therapy mostly exist because you are a student athlete, and you would pay for them whether or not a single brand ever paid you. The IRS treats expenses like that as personal, the same way it treats commuting or everyday clothes, even though staying in elite shape obviously supports your marketability. Being good at your sport is what makes NIL money possible, but that indirect connection has never been enough on its own.
The exception is training with a direct business purpose: a session filmed as sponsored content, a skills camp you run for paying attendees where you cover facility costs, or coaching you hire specifically to prepare for a paid exhibition or appearance. In those cases the expense belongs to the NIL activity itself. Document the connection at the time, in the contract or the content, not later.
Deductions NIL athletes actually miss
While training is a gray area, plenty of clean deductions go unclaimed every year. Mileage or airfare for appearance travel. Hotel nights for brand events. The agent's cut, which can be sizable. Camp insurance and facility rentals. Editing apps and subscriptions used for deal content. Half of your self-employment tax, taken automatically on Form 1040. Each deduction reduces both income tax and the 15.3% self-employment tax, so a well-documented $1,000 expense can be worth $300 or more in actual tax saved depending on your bracket.
Keep receipts and a one-line note about the business purpose on each. On audit, the athlete with contemporaneous records keeps the deduction; the one reconstructing a shoebox in April usually does not.