Even an Olympic victory comes with a price. In this case, it’s the taxes America’s victorious athletes can expect to pay when they return from the games.
Medals and prize money are both subject to income tax, according to the Americans for Tax Reform.
“It’s no different from winning Wheel of Fortune or the lottery,” Alex Knight, a tax partner at Atlanta’s Habif, Arogeti & Wynne, told Reuters .
A gold medal, which is worth $650, according to CNN, could cost athletes about $236 in taxes. While a bronze metal, which is worth $5, could only cost an athlete $2 in taxes
The real bite, however, will be taxes taken out of Olympians’ cash bonuses.
The U.S. Olympic Organizing Committee will award London champions $25,000 for a gold medal , $15,000 for silver and $10,000 for bringing home a bronze, Reuters reports.
At a 35 percent income tax rate, bronze medalists will owe the IRS a total of $3,500, silver medalists will owe $5,250 and top finishers will be liable for $8,750 , according to Americans for Tax Reform.
And here’s an update . . .
Senator Marco Rubio (R- Fla.) introduced a bill to Congress on Wednesday that would exempt Olympic winners from taxes on prizes received at the London games.
This is interesting as I never knew the U.S. Olympic Committee awarded large cash prizes for medal winners. I know a lot of other countries are a lot more involved in this sort of thing, but I think it takes away from the spirit of the games. I thought for the most part, other than USA Mens Basketball, Olympians were amature athletes. This prize money makes it seems like they are getting paid to play, which makes me think they are competing as professionals. Some of those folks that compete and win gold in both individual and team competition will come away with some serious money, like those gymnasts who are just in their teens.
I wonder if Rubio introduced that bill to get in the spotlight as a Tea Party member that want’s to make a stand that there are too many taxes or thinks it’s unpatriotic to collect taxes on Olympic winners who win prize money, or a bit of both.
So if my math is correct, if an American won gold . . .
$25,000 from the U.S. Olympic Committee – $8,750 paid in taxes for prize money – $236 for the tax of the worth of the gold medal = $16,014 take home money.