Did you know that if you win a medal at the Olympics then you will be taxed on it?
The above statement isn’t true for residents of every country but if you’re an American then unfortunately for you it’s true.
So you’ve spent years training to perfect your sport. The big Olympic day arrives and you are successful and win a medal. Surely, this is the pinnacle of any sportsman’s career?
If an American athlete is successful at the Olympics then it is also good news for the American tax authorities as under US tax laws anybody that wins an Olympic medal has to add the value of that medal to their taxable income.
This in itself raises an interesting question as to what is the “value” of an Olympic medal as I’m sure most successful Olympians consider their medal to be priceless.
According to information released by the organisation Americans for Tax Reform though “at today’s commodity prices, the value of a gold medal is about $675. A silver medal is worth about $385 while a bronze medal is worth under $5” (although personally I doubt Usain Bolt would sell his 100m gold medal for $675…).
The US Olympic committee also award cash prizes to successful medallists ($25,000 for gold, $15,000 silver and $10,000 for bronze).
Adding the value of the medal to the cash prize and then applying the 35% top rate of income tax in the US gives a tax bill per Olympic medal of:
Gold medal – $8,986
Silver medal – $5,385
Bronze medal – $3,502
As at the time of writing the US team had 34 gold, 22 silver and 25 bronze medals. This would give the US tax authorities over $500,000 of tax revenue.
So if you’re a successful American Olympic medallist then first of all many congratulations on your sporting success and secondly, don’t forget to settle your tax bill…