Start Saving, Michael Phelps. The IRS Is Taxing Your Olympic Medals.
Free Book Preview Tax and Legal Playbook
Hey aspiring Olympians, if you dream of taking home the gold, start training … and get a good accountant.
So with five golds and one silver around his neck, doggy paddle specialist Michael Phelps is set to swim home with $140,000 in his pockets. (Speedos have pockets, right?) But don’t go blowing all of that in the arm floaties section of Wal-Mart, Michael. Your pals at the IRS are going to want to take a bite of your historic medal count.
Americans for Tax Reform unhappily notes that using a tax rate of 39.6 percent, "victory tax" would be $9,900 for gold, $5,940 for silver and $3,960 for bronze.
Those numbers could be smaller for athletes in lower tax brackets, but given Phelps' net worth of $55 million, it looks like the human fish will be on the hook for the full $55,440 tax bill.