To athletes who’ve been training their entire lives, an Olympic medal is undoubtedly priceless. But as far as the IRS is concerned, it’s a different story.
Hugh Johnson, of the anti-tax organization Americans for Tax Reform, writes that U.S. medal winners are subject to taxes of as much as 35 percent on their medals and associated prizes and could end up owing up to $9,000 in taxes.
The value of the top athletic honor starts with the medals themselves, which, after all, are made of valuable metals. CBS News breaks it down like this: A gold medal is just over 1 percent gold, 93 percent sliver and 6 percent copper, meaning it’s worth about $644. The silver metal has a similar makeup, but with the gold replaced with more copper, bringing its value down to $330. The bronze, made mostly of copper, plus a bit of zinc and tin, is worth less than five bucks. CBS also says the medals given out at the London 2012 Summer Olympics are the biggest ever—twice the size of the ones awarded in Beijing in 2008.
Johnson notes that Olympic medalists also win cash prizes of $25,000 for gold, $15,000 for silver, and $10,000 for bronze. Together with the value of the medals (which he prices slightly differently than CBS), he puts the total tax burden for gold medal winners at $8,986. Silver medalists could pay $5,385, and the tax for athletes who bring home the bronze is $3,502. That’s assuming they’re in the highest tax bracket.
No taxes owed to Britain
Olympians can at least be grateful they won’t have to pay local taxes for earning their medals in Britain. Forbes reports that the UK government passed a special exemption to its tax laws so that competitors in the London Olympics won’t have to pay taxes that normally apply to professional athletes who compete in the country. Some people working in London to bring the games to life will also get an exemption, as will some employees of broadcasters following the Olympics. But anyone working in construction of the venues, whether they live in the UK or not, will be subject to taxes.
In any case, the really good news for U.S. Olympic athletes is that the cheers and sense of pride they get from their fellow Americans are not subject to any tax.
Written by: Livia Gershon
Loading ...
