Imagine yourself at the Sochi Winter Olympic games. You just made history, and won a gold medal in the event you are participating in. When you get back home to America, you get a letter from the Internal Revenue Service, with a tax bill for your winnings. Because earning a gold medal (award) in the Olympics is taxable. Then you get frustrated, because it’s just another way the Federal Government takes advantage of their people.
Yep it’s true, the IRS requires Olympians to pay taxes on the medals/winnings they win. As well as bonuses they earn as well. These Olympians spend thousands of dollars to train, and after they achieve success at the Olympics, they must pay the piper for their success. Most other countries on planet Earth does not require their Olympians to pay taxes for their medals. But in America, earning a medal also comes with a tax bill. And many states also require Olympians to pay their fair share in taxes as well.
Here is what happens when an Olympian earns a medal. The U.S. Olympic Committee awards its athletes $25,000 for gold, $15,000 for silver, and $10,000 for bronze. And it’s all considered taxable income. Even the medal is considered taxable. Did you know that the 2014 Winter Olympics gold medal is worth around $550 in precious medals? The amount of winnings taxed depends on the Olympians income. For example, if Shaun White won a gold medal this year, he is in the top 39.6 percent tax bracket. So he would pay as much as $9,900 for that gold medal and winnings.
For the 39.6 percent tax bracket, a gold medal could require Olympians to pay as much as $9,900, $5,940 for a silver, and $3,960 for a bronze medal. For the 28 percent bracket, Olympians could pay as much as $7,000 for a gold, $4,200 for a silver and $2,800 for a bronze medal. For the 10 percent bracket, Olympians could pay as much as $2,500 for a gold, $1,500 for a silver and $1,000 for a bronze medal. For Olympians who have major endorsements, they can easily pay their taxes. But some Olympians use all or most of their winnings for training and travel purposes. And the money winnings are crucial for those Olympians to continue training and traveling to competitions.
Don’t get me wrong, for Olympians who are popular and make major money on endorsements, they should be taxed on the income they make on those endorsements, since it’s their career. But some Olympians are needing funds so bad, they are running crowdsourcing projects to raise the money they need to even travel to Sochi. For some Olympians, they work another job and use the income they make from that job to invest in their training and travel. Taxing the winnings from someone winning a medal, is wrong! The money that is going to the Federal Government, needs to be used instead for training, equipment purchases, and travel expenses.
President Obama and some members of Congress are wanting to end the IRS practice of taxing winnings from Olympic medal winners. And I hope a bill passes to end the taxation of Olympic winnings. Because America needs to be proud of our Olympic winners! We should not be welcoming them back home with a tax bill!