With Olympic glory and the accompanying cash prize also comes a tax bill to Uncle Sam.
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A gold medal is actually made mostly of silver and has a value of about $564. For silver, it’s $5,940, and for bronze it’s $3,960. Up to about $US55,000 ($71,500) for his five golds and one silver. Apparently, the medals at the Rio Olympic games, this year, are among the largest and heaviest of all time, containing roughly 500 grams of either silver or copper.
As for Phelps and his maximum Olympic tax bill of $55,440, don’t worry. “Bronze is worth a negligible amount so it’s not taxed”. For every gold, you get $25,000. That income is considered taxable by the IRS, and it can eat up a sizable chunk of Olympians’ earnings, especially the most famous athletes who have inked lucrative endorsement deals.
The U.S.is one of the only countries that doesn’t provide government funding to its Olympians. But majority rely on small stipends from the USOC, support from local businesses or supplemental income from a day job. That’s actual metal that composes that Olympic medal, so why do athletes bite them?
The U.S. Appreciation for Olympians and Paralympians Act, which passed the Senate on July 12, would “exclude from gross income, for income tax purposes, the value of any medal or prize money received on account of competition in the Olympic Games or Paralympic Games”, according to the Library of Congress.
And those numbers are, technically, “income;” which means, technically, the Olympians will have to pay taxes on their prize money.
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He added that even tax free, American athletes get a fraction of the financial support that athletes in other countries get. Such is the case with Nobel prize winners although they receive more prize money – around $1 million.
