Here’s the IRS Bill Michael Phelps Will Get for Being Successful at the Olympics
The United States Olympic Committee awards Olympians cash prizes for the medals they win at the Olympic games, opening them up to IRS taxes.
The payout per medal is as follows: Gold receives $25,000, Silver receives $15,000, and Bronze receives $10,000. Bonuses were first introduced into the Olympic games in 1994, and have since become an incentive package for Americans to bring home more medals and glory for the U.S. on the world stage.
Just like rest of Americans earning a paycheck, Olympians are also taxed for these earnings. Michael Phelps, who won 5 golds and silver at the 2016 Rio Olympics, earned some $140,000 in cash. His tax payout amounts to $55,000 dollars, reports USA Today.
Just as the payout is different for the three medals, so too are the taxes on each medal. Gold medals are taxed at rate of 39.6 percent, which amounts to $9,900. Silver medals medals are taxed to the tune of $5,940 and Bronze are taxed at $3,960, according to Americans for Tax Reform.
Politicians have made many efforts over the past decade to stop the IRS from taxing Olympians but many of the first attempts failed. Sen. Marco Rubio introduced a bill (The Olympic Tax Elimination Act) in August of 2012 and his efforts were followed by then Republican presidential nominee Gov. Mitt Romney. Both attempts failed to garner enough support to pass.
The Senate passed a bill (S.2650-United States Appreciation for Olympians and Paralympians) in March, 2016, to stop the IRS from taxing Olympic earnings. A similar bill (H.R.2628-TEAM Act) was introduced into the House by Congressman Blake Farenthold (R-Texas) but has yet to come to a vote.
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