Quote:
Originally Posted by 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.
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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.