Olympians will have to cough up to the IRS should they be lucky enough to win any medals in London.

Personally I am not a big fan of the Olympics, but taxing olympic medal winners seems so wrong.
Can someone explain this tax ?
Is winning a medal considered earned income ?
I understand there is an honorarium with the medal, but this is punishing those for succeeding, right ?

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.

www.weeklystandard.com...

So an athlete is given the bronze medal at the Olympics then comes home and has to shell out $3,500 to the taxman?

Abhorrent!

reply to post by OLD HIPPY DUDE


I imagine the medals, especialy gold would be considered by the IRS to be of some intrinsic value.and may constitute an earning. If my employer agreed to pay me in gold instead of money I cant not exactly pay tax on it. All they need to do is stay out the country for a while untill there tax exempt.

The US has never won a medal in the Winter Olympic event the biathlon, however I think the IRS would be reluctant to tax them if they did.

I think it is a disgrace for the IRS to tax them. Just like the NCAA shouldn't require a medal winner to decline the token prize money if they are in college. Frankly, the IRS should be responsible for assisting in the archery competition every four years if nothing else.

We fought a war with England one time over excessive taxation. It was called the Revolution. It seems like it is time to do it again. OR WE CAN JUST STOP ELECTING DEMOCRATS AND REPUBLICANS. Let the people choose wisely.

This is their profession...the medals and prize money is their income...I don't see the problem.

These athletes don't just sit around and do nothing for 4 years..they compete and win money as income for their performance.


I'm failing to see why they should be exempt from taxes.

reply to post by OutKast Searcher


Because they cannot offset that "income" with the expenses of training unlike you can with gambling loses. Because that "income" is not a "wage", it is a "prize", whereas gambling "wins" and "loses" are consider gains and loses for a business. A gambler is a self-enployed business. An Olympic Athlete is a hobby.

Originally posted by OLD HIPPY DUDE
Personally I am not a big fan of the Olympics, but taxing olympic medal winners seems so wrong.
Can someone explain this tax ?
Is winning a medal considered earned income ?
I understand there is an honorarium with the medal, but this is punishing those for succeeding, right ?

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.

www.weeklystandard.com...

Somebody gets the award here for the biggest lie of the day. Someone who earns $10,000 for a tax year gets a personal exemption of $3800, leaving taxable income of $6,200, putting him in the 10% tax bracket. A single person also gets a standard deduction of $5,950, leaving taxable income of a whopping $250.00, with a tax of $25.00, not $3500. And that assumes no other itemized deductions and not married and no kids. Now why would someone exaggerate to the tune of fourteen thousand percent? Agenda, maybe?

reply to post by OutKast Searcher


There is just faaaaaaaaaaaaaaaaar too much taxation going on. Hey Congress! Here is a novel idea. CUT THE SPENDING. Fifty percent from the Pentagon budget. Then , since you are all millionaires, you can pay for your own healthcare. Then close down military bases overseas and bring the troops home. Then get rid of some government employees. There are faaaaaaaaaaaaaaaaaaaar too many. We poor people have to learn to live withing our means and the government should have to do the same.

THE CURRENT CONGRESS SHOULD BE FIRED EVERY SINGLE ONE OF THEM AND A NEW ONE ELECTED WHO CAN DO THE JOB.

Maybe some creative CPA can figure out a way for them to itemize and deduct the value of their training time (plus ancillary costs) to counter the tax liability of the honorarium and medal (altho the actual metallic value of the medals are de minimis).

So do you have to pay the IRS if you win an Oscar?

Originally posted by AndyMayhew
So do you have to pay the IRS if you win an Oscar?

Based on the current value of gold, the statue is worth about $500.00. With a net worth of more than 14 million dollars, Colin Firth, last year's best actor winner, can probably afford the max tax on that of $175. Except he doesn't have to pay the IRS a penny - he's English.

This is garbage. The money simply counts as income. Training expenses are far above the money they earn so there will be no taxes due on these amounts alone. Add in sponsorship deals,appearances, etc. however, and the top athletes will likely make some decent money that ends up being taxable. I would bet not more than one or two will end up paying a 35% rate on this additional income. In fact, no one ever pays a full 35% rate as the first $100,000+ is taxed at much lower rates. Thus only incremental income would be taxed at those rates.

I bet to a man and woman all Olympians would be happy to pay 100% tax if it meant they won a medal.

reply to post by OutKast Searcher

This is their profession...the medals and prize money is their income...I don't see the problem. These athletes don't just sit around and do nothing for 4 years..they compete and win money as income for their performance. I'm failing to see why they should be exempt from taxes.

You surprise me OKS ! Aren't you one who is against a higher business tax ? Punishing the wealthy for suceeding ?
Would you say sponsoring an athlete is a donation or a business expense ?
Once an athlete wins a medal and starts getting endorsment money ,wouldn't that be real taxable income ?

Is the money they get from "sales?" From "services offered?" From "winning" like the lottery? What exactly in the effort constitutes "income" that is taxable per running in a race?

If somehow this is "income" from some service they offer - running in a race, then it would seem to me that ALL the expenses incurred to get to the race are a business expense - that is if a person running in a race is a business. If they loose, it would seem to be the same. If running in a race is a business, then all expenses, which for a runner can be everything from food to socks, then all is fair game.

Problem for me is I can't see how anything they do is a business as they don't sell anything, they aren't "paid" anything to appear, they are not a service, and in the end there is no real transaction. In fact, they are more like a charity case then professional business.

As for the medal, this makes no sense at all. While I can see a tariff on bringing the medal into the country per weight, I don't see how the IRS is involved here. If the trophy in question is income, then every single child who gets a medal for reading, raising money for their school or winning their league championship in little league is a scofflaw and should be arrested.

To clear up a little something here, a Prize is an unexpected windfall and the tax rates are much higher. Just like you pay a different tax rate on a Christmas Bonus check. In fact, the rate you pay on a bonus check is equal to that as if it was a weekly income and the company does not pay half of your share like they do with your regular wages. Plus the employer is able to deduct the full amount of that bonus check as legitimate business expense.

For the Olympian, that Prize money is going to be taxed the full amount of 35%.

reply to post by OutKast Searcher

I guess since you dont have to be an amateur anymore to compete in the Olympics (ie a "professional" instead of engaging in a "hobby") then their considerable expenses are allowed to be deductible up to 100% of their income.

Originally posted by Murad
reply to post by OLD HIPPY DUDE

 

I imagine the medals, especialy gold would be considered by the IRS to be of some intrinsic value.and may constitute an earning. If my employer agreed to pay me in gold instead of money I cant not exactly pay tax on it. All they need to do is stay out the country for a while untill there tax exempt.

Pardon? As long as you are a US citizen you are subject to Taxation, no matter where you are, or how long you stay.

Originally posted by Ahabstar


For the Olympian, that Prize money is going to be taxed the full amount of 35%.

,
You may be a really great forum moderator, but you're a really crappy tax lawyer. There is no different rate for prizes. It is included in gross income, just like wages, salaries, commisions, alimony recieved lottery winnings, etc. If you're too lazy to look up the tax code citation, I can give it to you. Hint...... it's in Title 26 of the United States Code. Should you really be spreading false information?