Win an Olympic Medal, Expect a Big IRS Tax Bill - Law and Daily Life
Law & Daily Life - The FindLaw Life, Family and Workplace Law Blog

Win an Olympic Medal, Expect a Big IRS Tax Bill

When a member of Team USA scores an Olympic medal, the IRS scores gold by collecting taxes on the win, an anti-tax lobbying group reports.

For Olympic winners like swimmers Missy Franklin, Ryan Lochte, and members of the "Fab Five" women's gymnastics team, their newly acquired gold medallions -- and the accompanying prize money -- must be reported as income to the IRS, according to Americans for Tax Reform.

So what's the Olympic tax bill for each type of medal?

For Olympic medals, taxes are calculated based on the value of the medal itself and the prize money that comes with it.

According to Americans for Tax Reform's numbers, which are based on a top-income tax rate of 35%, the tax burden for different types of medals are as follows:

  • $8,986 for a gold medal. Each gold medal is worth $675, and the prize money that comes with it amounts to $25,000.

  • $5,385 for a silver medal. Each silver medal is worth $385, and comes with $15,000 in prize money.

  • $3,502 for a bronze medal. Each bronze is worth less than $5, but it also comes with a $10,000 prize.

The Olympic medal tax is "even worse" for American athletes, the anti-tax group asserts, because foreign competitors generally do not have to pay taxes on Olympic winnings in their home countries.

The United States "is virtually the only developed nation that taxes 'worldwide' income earned overseas," according to ATR.

To level the playing field, so to speak, a pair of GOP congressmen introduced bills Wednesday to do away with the Olympic medal tax. The bills won't make a difference this year, however, as they won't even be considered by Congress until after the August recess, The Washington Post reports.

Related Resources: