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/...rs_649187.html

[kelmac07]

WTF is right. Total BS.

[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]

Originally Posted by dave

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]

Originally Posted by 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.

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

[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]

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.

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]

Originally Posted by Starscream

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]

Originally Posted by emopunker2004

Still BS any way you slice it.

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]

Originally Posted by markem

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%.

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]

Originally Posted by shilala

I think snopes is full of sh1t.

How about MSN/Foxsports...

http://msn.foxsports.com/olympics/st...?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)