Medal winning Olympians are going to be swarmed upon their return to the states with celebrations, praise, media following, and…taxes?
That’s right. Athletes are liable to pay income tax on medals earned at the Olympic Games. This means that if you win a gold medal, you would be paying its weight in gold. Medal winners are subject to a maximum 35 percent tax rate, and, under U.S. law, they are required to add the value of their metals to their taxable income.
It’s not just the medals that these Olympians must add to their taxable income but their winnings as well. A gold medal is a $25,000 prize, silver is $15,000, and bronze is $10,000. Therefore, to our dismay, champions don’t necessarily come back with the pouring cash flow that we imagine.
Now, the saddest part is that the competitors of our U.S. athletes most likely pay no such taxation on their medals when they return home, as the U.S. is the only developed nation that taxes “worldwide” income gained overseas, one of the most difficult aspects for taxpayers to follow.
Florida Senator, Marco Rubio, thinks this is a disadvantage for our Olympians, which really has nothing to do with sports. He proposed a bill that would dispense with the tax that American athletes would have to pay for their winnings in London.
We still don’t know where the bill will be before the Closing Ceremonies but are hoping for the best, as winners would owe the IRS $8,986 for winning gold, $5,835 for winning silver, and $3.502 for winning bronze. Olympic legend, Michael Phelps already received 14 gold and 2 bronze medals before this year’s ceremonies, an amount that would cost him approximately $132,808 in income taxes upon his return to the states. With two more medals this year (and perhaps more to come) the total amount he owes to the IRS could add up to well over $150,000.
Perhaps Phelps will return back to Florida rather than his home state Maryland just to support the Senator who saved him from thousands of dollars owed back to Uncle Sam after his performance overseas. Like Senator Rubio, IRS tax lawyers are on your side. You may not be a medal winning Olympian, but a trustworthy tax attorney can provide you with your own fair treatment from the IRS.
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