Tax Rates of Olympic Proportions

I keep hearing news that is a real buzz kill for the Olympic spirit I've been riding on since the opening ceremony on Friday. The news is that these Olympic medal winners are going to be taxed like CRAZY for being the pride of the nation. 36% of their winnings have to be paid to the IRS. I can't begin to explain how ridiculous that number is. Most other countries do not even require their Olympians to pay any tax at all on their medals. When discussing this with my friends, they rationalized it by explaining that the prize money is significant and then these Olympians go home to sign big endorsement deals.

First of all, the prize money isn't all it's cracked up to be. Gold gets you a $25,000 prize, silver gets $15,000, and bronze gets $10,000. That sounds like a lot of money, but when you consider how financially strapped most of these athletes are because they put all their money over the last four years towards just getting into the Olympics, hardly makes up for a year's salary...more or less four year's salary.

Secondly, not every Olympian is Michael Phelps. How many 2012 U.S. bronze medalists can you name right now without having to Google it? Companies aren't interested in getting just any Olympic medalist to endorse their wares. They want the ones that made it big! They want the one that won the gold, and they might not even want that person next year if they lack sex appeal and charisma.

For Heaven's sake, their prizes aren't even worth that much. The most an Olympian could expect for a Gold medal is $675.

These are young people who strove for years to be the best at their athletic skill and had patriotic stars in their eyes. They didn't do this for money. They did this to make us proud and to make the rest of the world envy us. They did this for the love of the sport.

And, how does our country repay the beautiful models of youth and opportunity sent out to represent us to the world? With a hefty tax bill. It's just not right. But, then, how often have I ever sided with the IRS?

If you also have an unexpected tax debt, give me a call at 888-415-1337 or fill out the submission form for a free, no-obligation consultation.

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