Taxes Take a Bite Out of Olympic Medals

As the excitement surrounding the 2014 Sochi Winter games progress, there is always talk of how many medals each country has won so far. But, did you know that each Olympic medalist receives a cash prize for their medals? The U.S. Olympic Committee awards Olympians $25,000 for gold medals, $15,000 for silver medals and $10,000 for bronze medals. Not a bad deal, right? There’s only one catch: since the U.S. considers the medal bonuses as income earned in a foreign country, that also makes it taxable by the IRS. So how exactly, is the tax calculated, and how much of that bonus do the Olympians actually see?

Medal-winning athletes will be taxed based on their income, and they could also be responsible for state taxes, if the state from which they hail has an income tax. The chart below outlines just how much Uncle Sam will be pocketing from the medal bonuses of Olympic athletes.

Medal

High Tax Bracket

Mid Tax Bracket

Low Tax Bracket

Gold – $25,000

$9,900

$7,000

$2,500

Silver -$15,000

$5,940

$4,200

$1,500

Bronze-$10,000

$3,960

$2,800

$1,000

Bills have been introduced by congress to do away with the medal taxations, and most currently, Texas Representative Blake Farenthold, has reintroduced the Tax Exemptions for American Medalists, also known as the TEAM Act, which would exempt U.S. Olympic athletes from paying taxes on any medals and prizes they win. However, for the time being, Olympic medalists will still have to hand over a portion of their medal bonus once April 15th rolls around.