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

[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?

[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.