Win Olympic Gold, Pay the IRS

Win Olympic Gold, Pay the IRS
U.S. Olympic medal winners will owe up to $9,000 to the IRS.
Posted by Hugh Johnson on Tuesday, July 31, 2012 1:49 PM EDT

WASHINGTON, D.C. ­ While 529 hardworking athletes proudly represent the United States in the 2012 Olympics, any medals and money they earn wearing red, white and blue will be taxed by the IRS. According to research done by the Americans for Tax Reform Foundation, U.S. Olympic athletes are liable to pay income tax on medals earned and prizes received at the London games.

American medalists face a top income tax rate of 35 percent. Under U.S. tax law, they must add the value of their Olympic medals and prizes to their taxable income. It is therefore easy to calculate the tax bite on Olympic glory.

At today's commodity prices, the value of a gold medal is about $675.  A silver medal is worth about $385 while a bronze medal is worth under $5.

There are also prizes that accompany each medal:  $25,000 for gold, $15,000 for silver, and $10,000 for bronze.

So how much will U.S. Olympic medal winners have to pay in taxes to the IRS?

                 Medal Tax       Prize Tax       Total Tax Burden
Gold             $236              $8,750            $8,986
Silver           $135              $5,250            $5,385
Bronze           $2                $3,500            $3,502

American gold medal winners will pay the IRS up to $8,986. Silver medal winners will pay up to $5,385. Bronze medal winners will pay up to $3,502.

It gets even worse. Not only do our Olympic athletes have to pay taxes on their medals and prizes -- chances are their competitors on the field will face no such taxation when they get home. Because the U.S. is virtually the only developed nation that taxes "worldwide" income earned overseas by its taxpayers, our Olympic athletes face a competitive disadvantage that has nothing to do with sports.

http://atr.org/win-olympic-gold-pay-irs-a7091#ixzz22INEudZC