Go for the Gold....and pay the IRS

[LockOut]

Because conservatives are scrooges, the good folks at Americans for Tax Reform have gone through the fine print to find out what our Olympians will have to cough up to the IRS should they be lucky enough to win any medals in London.


Even by the standards of our government, the numbers are insane.

For instance: Americans who win bronze will pay a $2 tax on the medal itself. But the bronze comes with a modest prize—$10,000 as an honorarium for devoting your entire life to being the third best athlete on the planet in your chosen discipline. And the IRS will take $3,500 of that, thank you very much.

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

Silver medalists will owe $5,385. You win a gold? Timothy Geithner will be standing there with his hand out for $8,986.

So as of this writing, swimmer Missy Franklin—who's a high school student—is already on the hook for almost $14,000. By the time she's done in the pool, her tab could be much higher. (That is, unless she has to decline the prize money to placate the NCAA—the only organization in America whose nuttiness rivals the IRS.)

ATR notes that the real twist of the knife is that most other Olympians won't pay any taxes on their medals because America is one of only a handful of countries which taxes "worldwide" prize income earned overseas.


http://www.weeklystandard.com/blogs/go-gold-pay-irs_649187.html

:emo2004

[kelmac07]

WTF is right. Total BS. :2

[363]

that sucks

[Jefft72]

Wow. I didn't realize that there were cash awards for the medals won.

[icehog3]

They are considered honorariums. It would be nice if someone stepped up and took care of this, but these Olympic athletes aren't training and competing for money, and often are sponsored for their training costs. They do it for love of their sport.

[dave]

I guess I don't understand the outrage. I'm taxed on money earned or given to me. Why not them?

[Starscream]

I guess I don't understand the outrage. I'm taxed on money earned or given to me. Why not them?

I was thinking the same thing.

[E.J.]

X 3

[Mugen910]

They are considered honorariums. It would be nice if someone stepped up and took care of this, but these Olympic athletes aren't training and competing for money, and often are sponsored for their training costs. They do it for love of their sport.

I believe the IOC takes care of this for the athletes.
:tu

[markem]

If it counts as income under IRS rules, then it will be taxed as income. Note that the athletes probably pay many things out of pocket, so their schedule A or schedule C will contain possibly many valid deductions that will reduce their taxable income, etc. etc.

btw, the person who wrote the original diatribe assumed the highest tax rate in the land. If all they earned was $25K, the tax would not even be close to what is being claimed.

If you don't like it, don't blame the IRS, blame the people responsible for writing the laws that the IRS is required to follow.

just my opinion, of course.

[Starscream]

If it counts as income under IRS rules, then it will be taxed as income. Note that the athletes probably pay many things out of pocket, so their schedule A or schedule C will contain possibly many valid deductions that will reduce their taxable income, etc. etc.

btw, the person who wrote the original diatribe assumed the highest tax rate in the land. If all they earned was $25K, the tax would not even be close to what is being claimed.

If you don't like it, don't blame the IRS, blame the people responsible for writing the laws that the IRS is required to follow.

just my opinion, of course.
How are the winnings categorized? Is it considered earned income or prize winnings? Prize winnings is taxed higher than earned income I beleive. I'm an idiot when it comes to this subject, so anyone who knows feel free to correct me.

[markem]

How are the winnings categorized? Is it considered earned income or prize winnings? Prize winnings is taxed higher than earned income I beleive. I'm an idiot when it comes to this subject, so anyone who knows feel free to correct me.

Don't know, Andy. My accountant has never asked if I had prize winnings (I haven't), so didn't know that there was such a category in the federal code. Have you had to pay a separate federal tax on prize winnings?

[emopunker2004]

Still BS any way you slice it.

[GreekGodX]

Still BS any way you slice it.

:tpd:

They shouldn't have to pay taxes on their olympic medal winnings. Some of the athletes make nothing from competing in the olympics, and can't really have a job since they have to train year round.

[markem]

http://www.snopes.com/politics/taxes/olympics.asp

[Starscream]

Don't know, Andy. My accountant has never asked if I had prize winnings (I haven't), so didn't know that there was such a category in the federal code. Have you had to pay a separate federal tax on prize winnings?

I remember the IRS guy who won on Who Wants to be a Millionaire saying it was almost 50%. :D

I've heard from other people that prize money is taxed higher as it is a luxury. I've never won the lottery nor won on Jeopardy, so my statement is based on word of mouth alone.:)

[shilala]

I think snopes is full of sh1t.

[Genetic Defect]

Crazy

[drevim]

I think snopes is full of sh1t.


How about MSN/Foxsports...

http://msn.foxsports.com/olympics/story/US-medal-winners-pay-stiff-price-in-taxes-080212/?ocid=ansfox11

This is all over right now, so snopes doesn't have the market cornered. And lawmaker are involved with trying to get it overridden.

I have mixed feelings about it. I can't imagine the dedication to get to the point of winning a medal, so they deserve what they get. On the flip side Phelps is somewhere in the neighborhood of $400,000 in medal monies alone, not counting endorsements, not sure he shouldn't have to pay something.

[Coach Deg]

I personally do not think they should get taxed on these medal awards, but I do feel it works out in the long run.

- if you win gold and parlay it into endorsement deals a couple of thousand is not going to hurt you.

- if you win gold and do not have all of the endorsements, you will be able to write off all your training expenses and get it all back at tax time. ( I believe, I could be wrong)

[Starscream]

I personally do not think they should get taxed on these medal awards, but I do feel it works out in the long run.

- if you win gold and parlay it into endorsement deals a couple of thousand is not going to hurt you.

- if you win gold and do not have all of the endorsements, you will be able to write off all your training expenses and get it all back at tax time. ( I believe, I could be wrong)

They're not being taxed for the medal, they are being taxed for the prize money.

[hammondc]

They're not being taxed for the medal, they are being taxed for the prize money.

This. If I drew a $25k lottery scratch off, I would be taxed.

[yachties23]

How about MSN/Foxsports...

http://msn.foxsports.com/olympics/story/US-medal-winners-pay-stiff-price-in-taxes-080212/?ocid=ansfox11

This is all over right now, so snopes doesn't have the market cornered. And lawmaker are involved with trying to get it overridden.

I have mixed feelings about it. I can't imagine the dedication to get to the point of winning a medal, so they deserve what they get. On the flip side Phelps is somewhere in the neighborhood of $400,000 in medal monies alone, not counting endorsements, not sure he shouldn't have to pay something.

Phelps also has huge endorsement deals from Wheaties, and Subway, I'm sure he is doing fine.

[replicant_argent]

I consider this a non-story.
While the income tax codes are convoluted and ridiculous, the athletes can offset training and travel costs, etc.
You earn money, you pay taxes.
While it is a wonderful thing to represent your country in the Olympics, they still have to play by the rules and the tax code.
Giving athletes a "bye" perpetuates hero worship culture. Don't get me wrong, I like sports, I like watching the Olympics, I get teary eyed at the anthem. I still do not choose to treat them or view them as "more than equal."

[Dave128]

I think they should get paid more. A back-up kicker on the worst team in the NFL gets paid a ton more than these athletes that train their entire life. It doesn't make sense to me.

Found this article this morning:
http://bottomline.nbcnews.com/_news/2012/08/06/13105189-um-how-do-we-break-this-to-you-team-usa-you-didnt-actually-win-gold?lite

[replicant_argent]

and a back up kicker on an NFL team gets FAR more than his job is worth. If someone is using that as a basis for anything, you should reconsider your values set, IMO.

[Dave128]

Seriously? Because, in my opinion, I feel the Olympic athletes should be paid more, you've now moved off the topic so far as to judge my values? What an ugly turn this thread has taken.

For the record - I have no problem with them paying taxes on their winnings.

[NeuRon]

land of the free! only if you pay up! rediculous.. these people are representing our country.. grow up

[replicant_argent]

I think they should get paid more. A back-up kicker on the worst team in the NFL gets paid a ton more than these athletes that train their entire life. It doesn't make sense to me.

Found this article this morning:
http://bottomline.nbcnews.com/_news/2012/08/06/13105189-um-how-do-we-break-this-to-you-team-usa-you-didnt-actually-win-gold?lite

I would also suggest, since you are partaking in the conversation, that a kicker on an NFL team has most likely also been "training all his life."

As far as them "representing our country" and not paying taxes for that definition, I am all for that. As long as you put service members in the same class.
How do the perceptions of people change when looking at this same conversation when it involves professional athletes? Such as the US Olympic basketball team?

I am most certainly allowed to have my own views on whether I think athletes are paid too much or too little, am I not? Simply because I think differently, and disagree with the norm, via my own values, does not exclude me from stating those values, and my supposition that others might question their own.

By the time all is said and done, I hardly think the tax issue is a burden for many, if not any, of the medal winners, post USOC processing and guidance.

[E.J.]

Are members of our military tax exempt on their wages?

[Dave128]

I would also suggest, since you are partaking in the conversation, that a kicker on an NFL team has most likely also been "training all his life."

As far as them "representing our country" and not paying taxes for that definition, I am all for that. As long as you put service members in the same class.
How do the perceptions of people change when looking at this same conversation when it involves professional athletes? Such as the US Olympic basketball team?

I am most certainly allowed to have my own views on whether I think athletes are paid too much or too little, am I not? Simply because I think differently, and disagree with the norm, via my own values, does not exclude me from stating those values, and my supposition that others might question their own.

By the time all is said and done, I hardly think the tax issue is a burden for many, if not any, of the medal winners, post USOC processing and guidance.

I think you need to check your values :)

[King James]

Are members of our military tax exempt on their wages?

It varies from state to state, but most states have some kind of an exemption from wages earned in combat zones or while on active duty, but not wages otherwise. I'm not in the military, so if I'm incorrect someone more in the know can fix something I misstated.

[replicant_argent]

I think you need to check your values :)

Nice review.

[jluck]

land of the free! only if you pay up! ridiculous.. these people are representing our country.. grow up

Unfortunately thats our USofA.

I am gainfully employed,Taxes are taken from my earnings, I am left a Pittance to buy taxed necessity's and goods of choice. I feel it should be the same for professionals or producers.:2