Millions are watching anytime a U.S. athlete wins a medal at the Olympics and so, too, is Uncle Sam.
The Internal Revenue Service goes for the gold any time an American athlete medals because they receive a cash bonus from the U.S. Olympic Committee for each medal. The bonus — $25,000 bonus for gold medal, $15,000 for silver and $10,000 bronze, according to SavingAdvice.com — is deemed to be taxable income and, as with all citizens, there may be state and federal consequences based on the level of income. According to the Web site, someone in the top, 39.6-percent bracket would pay about $9,900 for a gold. An athlete in the 28-percent bracket would pay $7,000 for a gold.
Not everyone thinks that’s fair, though, and last week Reps. Blake Farenthold (R-Texas), Walter Jones (R-N.C.) and Pete Sessions (R-Texas) proposed the Tax Exemptions for American Medalists Act, which was referred to the House of Representatives Ways and Means Committee. “Gross income shall not include the value of any medal awarded in, or any prize money received from the United States Olympic Committee on account of, competition in the Olympic Games,” the bill states (via thehill.com). If enacted, it would take effect starting this year.
“If enacted” is the tricky part, though. Bills like this one have been introduced from time to time, and President Obama has indicated that he would support and sign an exemption into law. But, so far, the bills have not come up for a vote it isn’t likely that the Winter Games will be a bigger impetus for Congress than the Summer Games in 2012, when Sen. Marco Rubio (R-Fla.) proposed an exemption.
“Our tax code is a complicated and burdensome mess that too often punishes success, and the tax imposed on Olympic medal winners is a classic example of this madness,” Rubio said at the time (via thehill.com). “Athletes representing our nation overseas in the Olympics shouldn’t have to worry about an extra tax bill waiting for them back home.”
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