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IRS Levies Taxes on Olympic Athletes

By most accounts, the 2016 international Olympics were extremely successful for the United States. The United States ended up earning more gold medals and total medals than any other country, by a pretty significant margin. While the high medal count proves that it was very successful for the individual athletes, one recent news article (http://nesn.com/2016/08/usas-olympic-medal-winners-must-pay-taxes-as-uncle-sam-wants-slice-of-glory/) points out that it could end up being successful for the Internal Revenue Service is well.

Like almost every other country in the world, the United States provides a financial reward to athletes that earn a medal. Gold-medal winners typically earn about $25,000, silver medal were winners and up earning about $15,000, and bronze medal winners end up winning about $10,000.while the financial reward may seem slim as it is a reward for years of training and hard work, the internal revenue service in the United States will fully tax that income.The amount of the total tax will be equal to each individual’s highest marginal tax rate. Because of this, some people could end up spending much more on taxes than others as the marginal tax rate varies greatly from one athlete to the next.

While the base reward provided by the US Olympic committee is taxed, so are some other areas of income. The recipient of a gold, silver, or bronze medal will also be taxed on the value of the underlying medal at the time of receipt. Due to the high value of gold at the time, the tax on a gold medal could easily be an additional few thousand dollars. Those who receive an award from the US Olympic committee could also end up facing additional taxation from both state and local ordinances. This amount of tax will be dependent on where the athlete resides and does the both of their training.while the total amount of taxation may seem small compared to some athletes salaries, those that do not have lucrative marketing contracts could end up seeing a big dilution in their income due to the taxation.