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Sign up with Google Sign up with FacebookQ: Paying taxes for winning a medal at the Olympics ?
Surprising information I found out today :
Go for the gold — but should you succeed, be prepared to dole out some gold.
The U.S. Olympic Committee awards prize money to American medal winners: $25,000 for gold, $15,000 for silver, $10,000 for bronze. That prize money is taxed at a rate of as much as 35 percent, Americans for Tax Reform calculated. On top of that, the medals themselves are taxed: You only have to fork over $2 to the IRS for the privilege of keeping your bronze medal, but carve off $236 worth from that gold medal.
Michael Phelps should have no trouble shouldering the tax burden — he makes millions in endorsements.
But fellow U.S. swimmer Allison Schmitt has won two gold, a silver and a bronze in London. That’s $75,000 in total prize money — and $26,857 owed to the United States Treasury.
Are you aware of any other countries doing this ? Is it fair?
It fits the very definition of earned income, so of course Uncle Sam is going to want his cut. I pay my taxes on earned income, so why shouldn't they?
paulmartin:
I agree they shouldnt pay tax on Medals.But what about Soldiers,Firemen Policemen,the list could go on and where,could the line be drawn of who pays
paulmartin:
P.S should have been a new answer,I wasnt commenting on your reply cooter
cooter:
Haha, glad I refreshed the page. I was hammering out a nice reply :P
I think it should be taxed as capital gains...lower rate...although for tax laws it would probably be considered something akin to tips.
But in theory the athletes would be independent contractors working for themselves so if they have a creative accountant they could write off a crapload.
In terms of the US practice, subject to the Internal Avenue Code or other legislative requirements.