There’s been a bit of an uproar in the financial media about US Olympians being taxed for winning medals in their competitions.
The tax kicks in because the US Olympic Committee pays $25,000 for a gold medal, $15,000 for silver, and $10,000 for bronze. This money is considered income and is then taxed by the US government regardless of where the income is earned. Other countries do not tax their medalists and in some cases pay them even more.
Do you think it is fair to charge tax on Olympic earnings?
If you know an Olympian that needs some financial advice, here are some tips:
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I think taxing them is fair. I mean it is income that they receiving and it isn’t like they already spent it. I bet some countries just get the medal and no award at all so they should consider themselves lucky!
These monies are gifts, not income. I can only imagine how quick you would offer 35% of any gift to you; am I right?
An award, unless paid as a result of damages incurred, is income.
I think the headlines on this issue are a bit misleading. That income is added to their other income which will determine if they actually pay tax on winning medals and awards. For example the kids who are still in high school with no other income; probably not, while Kobe Bryant; most definitely yes.
I read somewhere that the medalists are taxed on both the cash they receive and the value of the medal itself. I don’t have much of an issue taxing the money they receive since it is earned income. At the same time, I think it would be completely fair if the government made exceptions for Olympians.
However, they shouldbn’t be taxed on the value of the medal itself. It’s not like they are going to sell it. It’s a symbol of accomplishment and most athletes probably don’t care about the actual mineral content so why tax them on it?
Thanks Kevin
See you soon, hopefully!
Thanks for the mention of the Tour de Personal Finance!
Thanks for the weekend reading list!
I was disturbed by it at first but changed my mind. It’s no different from a salesman getting taxed on his commission or bonus so I’m fine with it.
I would not mind if we made an exception for Olympians and didn’t tax them on their medals or earnings, as a thank you for representing the country.
I suspect that Lebron James and Kobe Bryant would be most appreciative of your generosity.