OMG!!!! Olympic medalists have to pay a tax!!!!!

[wfooshee]

OMG!!!! Olympic medalists have to pay a tax on their medals!!!!!

A Facebook friend of mine just posted that, lamenting how unfair it is for the IRS to tax a gold medalist to the tune of nearly 6000 dollars.

Well, yeah, that's pretty rough if that's all there is to it.

What this person failed to realize is that the "tax" is not because they won a medal, it's because the US Olympic Committee pays the athletes cash money as a prize for winning the medal. For a US athlete, our committee pays 25 grand for a gold, 15 for a silver, and 10 for a bronze.

So do the math: $6,000 "tax" on $25,000 is a bit less than 25 per cent. That's an average tax bracket, isn't it? So what's the big deal?

I figure that the IRS imposes withholding on the prize money as income, which after all, it is, and when the athlete files their return in the spring, they may see some of that back as part of their tax refund. This is no different from what happens to your paycheck every week.

So I don't really have a point here, because the athletes are being taxed on their prize money as income, not just because they won a medal. I guess my point is about gullibility. You see something on the Internet so now you have a "cause."

Like boycott Chick-Fil-A or something.....

 

[QuarterRutger]

WTF, that doesn't make any sense. You won something so you pay?!

 

[wfooshee]

See, you're doing the same thing.

The prize money is income, so it's taxable.

Just like winning a car on a game show. You pay income tax on its value.

If I were fortunate enough to win the Powerball lottery tonight (181 million dollars) you can be sure the tax folks will have their say about it!

It's not, "OMG I have to pay because I won," it's "Well, I got this big paycheck and it's taxable income."

Not a big deal.

OTOH, apparently British athletes have no worries in this regard. Their Olympic committee pays no prize money, from what I've read.

 

[BlisteredHand]

Maybe as athletes are self employed professionals they can claim back the tax cost of work related clothing and travel and accommodation etc. So it's not too bad.

 

[BJBEOSmitty]

WTF, that doesn't make any sense. You won something so you pay?!

No....

You have income - money - so you pay the same tax that everyone one else pays when they have income.

If I make a hit record, I pay taxes on my income. Win the lottery, same. Get a part time job cleaning bathrooms... same.

 

[Slash]

Yeah my dad was shocked when he found out

 

[Robin]

I'm surprised that athletes are paid prize money by the their committee and they should pay tax on it, they shouldn't even be getting it! The endorsements they will get from winning anyway will be millions.

The Olympics is supposed to be about the pride and a 'no money incentive zone'. Unfortunately its becoming more and more subliminally commercial with every games.

 

[BJBEOSmitty]

Yeah my dad was shocked when he found out

Why? It makes perfect sense. Ask him if he gets a paycheck from a second job, if he has to pay tax on it. A medalist gets $, income, and pays a tax on it.

It's as easy to understand as gravity, or why bacon tastes good, or the greatness of the small of a woman's back.

 

[MSTER232]

Yeah my dad was shocked when he found out

I'll admit that I was a little surprised myself when I found out too.

 

[BlisteredHand]

No....

You have income - money - so you pay the same tax that everyone one else pays when they have income.

If I make a hit record, I pay taxes on my income. Win the lottery, same. Get a part time job cleaning bathrooms... same.

In the UK the millions you win on the lottery are tax free. Which is nice. But tax man wins as the tax is taken on the cost of the tickets. Which is of course much more tax than taxing the prizes.
So really it's unfair if you get taxed on lottery wins if you have already purchased a ticket. Are tickets in America tax free?

 

[BJBEOSmitty]

Purchasing a lottery ticket does not carry sales tax in the USA. In the UK, if no one wins, those sales tax dollars are of course kept? Interesting.

 

[arora]

Well they are not amateurs anymore are they? Having said that, it's still ridiculous imo. Then again, I find the Olympics ridiculous anyway.

 

[Korza]

Prize money isn't necessarily an income. If I win money in a raffle or sweepstakes, the tax man doesn't reach into my pocket and take any of it. Is there a level (i.e. prizes in excess of a certain amount) where it goes from being a prize to an income?

 

[wfooshee]

Yeah, the level is a penny. Theoretically. But by law here, the folks awarding you the prize don't have to report it to the IRS until it reaches a certain amount. I couldn't tell you where that boundary is, though. So if you win big enough, the tax man does reach in and take a withholding, and you get paperwork to attach to your income tax return for that year.

I know that if you work for someone as a non-employee (one-off service, contractor, etc.) your compensation must be reported if it exceeds 600 bucks during the year.

 

[shmogt]

Lolo you make no sense saying how insane it is and by the end are basically saying it makes perfect sense. Income is income so cant really complain too much. No athlete from the US who wins a gold medal will care at all tho because the amount of money from sponsorship deals will be a lot bigger pay out. That little black girl who is a gymnast just got a ton of deals and is the new face for some cereal company. Phelps has most medals ever so I'm sure that guys gonna go all the way to Forbes as one of the most paid athletes. From a advertising stand point you can not get a better person to represent your brand. Actors and singers etc not everyone likes but a Olympic athlete only represents your country so you know everyone will love him.

 

[Kylehnat]

Just like winning a car on a game show. You pay income tax on its value.

Don't forget about all those people who sued Oprah for giving them a free car because they couldn't afford the income tax, or couldn't afford the insurance .

 

[Ridox2JZGTE]

That means being given a gift or a prize for an achievement or simple reason of charity is also an income ... how convenient ...

 

[QuarterRutger]

Don't forget about all those people who sued Oprah for giving them a free car because they couldn't afford the income tax, or couldn't afford the insurance .

Do you really need to pay tax for a gift -.- that's lame

 

[Nicksfix]

Like anything else, it's all about money.

If I were an Olympic athlete, I would refuse the medal. Who needs it ? Your name will still go in the record books if you won a medal.

Put that one in your tax pipe and smoke it !!!

 

[BJBEOSmitty]

Like anything else, it's all about money.

If I were an Olympic athlete, I would refuse the medal. Who needs it ? Your name will still go in the record books if you won a medal.

Doctors and insurance companies would love you, because millions and millions of people would injure themselves laughing at you for longer and harder than they has ever laughed in their life.

 

[Roo]

Like anything else, it's all about money.

If I were an Olympic athlete, I would refuse the medal. Who needs it ? Your name will still go in the record books if you won a medal.

Put that one in your tax pipe and smoke it !!!

You'd refuse $25,000 so that you don't pay $6,000 in tax?

In any case, the cash and the tax come from winning the medal, not receiving the medal itself...

 

[Nicksfix]

Doctors and insurance companies would love you, because millions and millions of people would injure themselves laughing at you for longer and harder than they has ever laughed in their life.

Let them laugh. You don't think that we are not paying enough in taxes as it is ?

You'd refuse $25,000 so that you don't pay $6,000 in tax?

Yep. As said above, we pay enough in taxes.

EDIT :

The second part of this is, your going to make Olympic Athletes pay for their medals when some of them are under age (minors) and probably without a job ? Let's take a look at Kathleen Ledecky. 15 years old, gold medalist in the 800M freestyle. When she gets home from London, goes to the family mailbox, see's a letter addressed to her from the IRS stating that she now owes them 6K for her performance in London. Who's going to pay for this ? Her ? She's more than likely unemployed, so now Mom and Dad are forced to pay out 6K (or whatever) for this ? That's bull !!! How do we know that her family is not on a limited income ? Now they are forced to pay out 6K that they really can't afford.

Paying out $$$ for a medal that you won, as a minor no less is totally absurd.

 

[MatskiMonk]

I pay Tax on my income, and any other benefits that arise from my job. I don't see why Olympians should be any different. Especially considering the amount of sportspeople out there that get away without paying the tax that they should (footballers, I'm looking at you!).

Somebody has to foot the bill for those on benefits.

 

[Famine]

Like anything else, it's all about money.

If I were an Olympic athlete, I would refuse the medal. Who needs it ? Your name will still go in the record books if you won a medal.

Put that one in your tax pipe and smoke it !!!

Uhhh...

You're not charged income tax on a medal - that's ridiculous. You're charged income tax on the salary "USOC" pays you (in income) for winning.

The second part of this is, your going to make Olympic Athletes pay for their medals when some of them are under age (minors) and probably without a job ? Let's take a look at Kathleen Ledecky. 15 years old, gold medalist in the 800M freestyle. When she gets home from London, goes to the family mailbox, see's a letter addressed to her from the IRS stating that she now owes them 6K for her performance in London. Who's going to pay for this ? Her ? She's more than likely unemployed, so now Mom and Dad are forced to pay out 6K (or whatever) for this ? That's bull !!! How do we know that her family is not on a limited income ? Now they are forced to pay out 6K that they really can't afford.

Paying out $$$ for a medal that you won, as a minor no less is totally absurd.

Uhhh...

She just got $25k in income (from her job). After she pays the $6k tax bill, she's got $19k. That's $19k the family now has extra from her job. That's how income tax works.


In the US you'll usually find you're billed nearly 50% of a major lottery win. Would you refuse to accept $250m from the lottery because you have to pay $120m in tax (and still have $130m afterwards)?

Don't get me wrong, I'm less of a fan of income tax than most people, but your reasoning makes no sense.

 

[wfooshee]

Lolo you make no sense saying how insane it is and by the end are basically saying it makes perfect sense.

No, I pointed out that my friend harped about how insane it is and then stated how normal it actually is.

The stories going around about how athletes are taxed for their medals are ludicrous. They are taxed on the income from the payments made to them by the U.S. Olympic Committee. They made money, they pay income tax on it, just like anybody who makes money anywhere!!!!

An athlete winning a gold medal does not have to cough up 6 grand to receive the medal. The IRS withholds the nearly 6 grand from the payment made to him by the Committee. The athlete still comes out well ahead, and when he files next year will likely see a decent part of that withholding refunded, depending on what kind of deductions he can come up with. He'll still pay a tax, though, just like every American with an income.

Being a minor is irrelevant. A 12-year-old kid working a summer job pays income tax if he earns enough money. There is a threshhold under which nearly everything withheld would be refunded when he files, but he still has to file.

@ Nicksfix: You stated you'd refuse the $25,000 prize to avoid paying tax on it. Do you refuse your paycheck to avoid paying tax on it? Of course not.

Again, the athletes are not paying for the medal. They are being taxed in their income, just like everybody else in the country.

 

[BJBEOSmitty]

Let them laugh. You don't think that we are not paying enough in taxes as it is ?



Yep. As said above, we pay enough in taxes.

EDIT :

The second part of this is, your going to make Olympic Athletes pay for their medals when some of them are under age (minors) and probably without a job ? Let's take a look at Kathleen Ledecky. 15 years old, gold medalist in the 800M freestyle. When she gets home from London, goes to the family mailbox, see's a letter addressed to her from the IRS stating that she now owes them 6K for her performance in London. Who's going to pay for this ? Her ? She's more than likely unemployed, so now Mom and Dad are forced to pay out 6K (or whatever) for this ? That's bull !!! How do we know that her family is not on a limited income ? Now they are forced to pay out 6K that they really can't afford.

Paying out $$$ for a medal that you won, as a minor no less is totally absurd.

My friend, when she goes to the mailbox, has the $25,000 check already arrived or is it next to the tax bill? Better yet, she had the proper amount of withholding taken out of the $25,000 ahead of time?

Let me guess... You have never done your own taxes have you.

 

[XoravaX]

Yep. As said above, we pay enough in taxes.

You understand that the taxes are used to fund services that are there to help you? Security like police and military; legal system; healthcare; education; scientific research etc. Or do you?

None of this would exist without taxes. You'd live in some sort of a post-anarchic world without any government if there weren't taxes. Or if it were only that there would have been no taxes in the US, your government wouldn't have had enough money to field your military and you'd been a part of Soviet Union/Russia for ages.

The second part of this is, your going to make Olympic Athletes pay for their medals when some of them are under age (minors) and probably without a job ? Let's take a look at Kathleen Ledecky. 15 years old, gold medalist in the 800M freestyle. When she gets home from London, goes to the family mailbox, see's a letter addressed to her from the IRS stating that she now owes them 6K for her performance in London. Who's going to pay for this ? Her ? She's more than likely unemployed, so now Mom and Dad are forced to pay out 6K (or whatever) for this ? That's bull !!! How do we know that her family is not on a limited income ? Now they are forced to pay out 6K that they really can't afford.

Paying out $$$ for a medal that you won, as a minor no less is totally absurd.

You understand that she would get $25K, of which she would have to pay $6K tax. Thus leaving $19K for the girl.

If she didn't accept that $25K, she wouldn't have to pay that $6K either. But that'd leave her $0 benefit, $19K less than the option with the $6K tax.

 

[a6m5]

I think the confusion is the mention of the medals. Some people have trouble getting over that the Government isn't taxing you for winning the medal. They are taxing you when you get paid for the winning that medal.

Well they are not amateurs anymore are they?

Exactly!

Like boycott Chick-Fil-A or something.....

I'm totally neutral on this thing, but I gotta tell you...... you & all the media coverage makes me want to try Chick-Fil-A chicken!

 

[Azuremen]

This thread is an excellent test for finding people that actually bother to read the whole first post before reacting.

Kind of eye opening, really.

 

[wfooshee]

This thread is an excellent test for finding people that actually bother to read the whole first post before reacting.

Kind of eye opening, really.

Yeah. Much fun!

you & all the media coverage makes me want to try Chick-Fil-A chicken!

I rather enjoy a #1-no-pickle once in a while, but the place is over-run with right-wing zealots now, proving their point by "supporting" the restaurant. I can't be seen in that.