US Athletes Have to Pay Up to $10,000 in Taxes Just for Winning an Olympic Gold Medal
While there a few days remain before the closing ceremony at the Summer Olympics in Rio, American athletes have earned at least 85 medals -- 28 gold, 29 silver, and 28 bronze -- in various events at the Games. And despite historic victories by Michael Phelps, Katie Ledecky, and Simone Biles, it looks like the true American Olympic champions is none other than the damn Tax Man.
That's right, folks: American Olympic athletes competing in Rio are required to pay state and federal income taxes on the cash bonuses they receive for winning medals at the Games and even on the value of the actual medals they get to bring home, according to a report by USA Today. The US Olympics Committee awards the Olympians $25,000 for gold medals, $15,000 for silver medals, and $10,000 for bronze medals, but because the IRS views the winnings as bonuses, they don't get to keep even close to all of the cash.
Olympians in the highest income bracket -- with a tax rate of 39.6% -- will pay the highest "victory" taxes on their bonuses; specifically, as much as $9,900 for gold medals, $5,940 for silver medals, and $3,960 for bronze medals, per the report. With that said, medalists in lower brackets will have to fork over less money, but it's a tax on the international sports glory they earned for their country, nonetheless. As for the actual medals, the tax is based on the value of the materials: close to $600 for a gold, a little over $300 for silver, and bronze medals aren't worth much at all, monetarily speaking.
Perhaps unsurprisingly, lawmakers are hoping to change this with legislation that would exempt athletes in the Olympics and Paralympics from paying any tax to the federal government on "the value of any medal or prize money," according to a report by CNN. The bill, introduced by New York Sen. Chuck Schumer, passed in the Senate in July and could soon be considered by the House. Individual states, too, would also have to pass similar legislation in order to bring the Olympians' tax bill for their medals down to zero.
Of course, some Olympians don't have to worry much, thanks to big endorsement deals and other financial breaks for their success, but as CNN explains, that's unfortunately not the case for most American athletes competing in Rio, many of whom struggle to finance their Olympic dreams.
Good thing they're doing it for the love of their respective sports, and not the money.
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