Start Saving, Michael Phelps. The IRS Is Taxing Your Olympic Medals.
Hey aspiring Olympians, if you dream of taking home the gold, start training … and get a good accountant.
As reported by Americans for Tax Reform, the United States Olympic Committee awards monetary prizes to those athletes who medal: $25,000 for gold, $15,000 for silver and $10,000 for bronze.
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.