{"id":1513,"date":"2021-08-12T14:48:52","date_gmt":"2021-08-12T18:48:52","guid":{"rendered":"https:\/\/www.bowditch.com\/estateandtaxplanningblog\/?p=1513"},"modified":"2022-08-10T15:40:26","modified_gmt":"2022-08-10T19:40:26","slug":"olympic-medals-and-the-tax-man","status":"publish","type":"post","link":"https:\/\/www.bowditch.com\/estateandtaxplanningblog\/2021\/08\/12\/olympic-medals-and-the-tax-man\/","title":{"rendered":"Olympic Medals and the Tax Man"},"content":{"rendered":"<p>As the Tokyo Olympics come to a close and the athletes return to their home countries, it may be time for U.S. athletes to sit down with their tax advisor.\u00a0 The United States Olympic &amp; Paralympic Committee has <a href=\"https:\/\/www.teamusa.org\/Team-USA-Athlete-Services\/Financial-Resources\" target=\"_blank\" rel=\"noopener\">pledged to award<\/a> U.S. medalists in the 2021 Olympics $37,500 for each gold medal, $22,500 for each silver medal and $15,000 for each bronze medal won.<\/p>\n<p>It may come as a surprise to some, but those financial awards for winning an Olympic medal may very well be subject to income tax.\u00a0 The U.S. tax code specifically includes <a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/74\" target=\"_blank\" rel=\"noopener\">prizes and awards<\/a> in gross income subject to income tax. Some refer to this as the \u201c<a href=\"https:\/\/www.marketwatch.com\/story\/3-ways-olympic-athletes-taxes-are-different-than-yours-11626904525\" target=\"_blank\" rel=\"noopener\">victory tax<\/a>\u201d.<\/p>\n<p>Fortunately, many winning athletes will not pay income tax since the tax code exempts prizes and awards from income tax for those athletes making under $1 million dollars annually.\u00a0 For the lucky few athletes with lucrative endorsement deals such as <a href=\"https:\/\/www.forbes.com\/sites\/justinbirnbaum\/2021\/08\/02\/heres-how-much-olympic-superstar-simone-biles-makes-in-endorsements\/?sh=105197395e99\" target=\"_blank\" rel=\"noopener\">Sue Bird or Katie Ledecky<\/a>, they can expect hefty federal tax bills. In the case of Ledecky, she will likely owe over $44,000 in federal income tax for her 2 gold and 2 silver medals (at the top 37% federal rate). She may even owe state income tax depending on her state of residence. \u00a0A 2016 effort to end the \u201cvictory tax\u201d in California <a href=\"https:\/\/www.martindale.com\/legal-news\/article_mcdonald-hopkins-llc_2234728.htm\" target=\"_blank\" rel=\"noopener\">stalled in Committee<\/a>; it remains to be seen whether a similar effort will take hold elsewhere as a new crop of Olympic medalists return home.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>As the Tokyo Olympics come to a close and the athletes return to their home countries, it may be time for U.S. athletes to sit down with their tax advisor.&nbsp; The United States Olympic &amp; Paralympic Committee has pledged to award U.S. medalists in the 2021 Olympics $37,500 for each&hellip;<\/p>\n","protected":false},"author":1,"featured_media":1516,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"_links_to":"","_links_to_target":""},"categories":[11,10],"tags":[55,385,383,384,382],"class_list":["post-1513","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-celebrity-current-events","category-taxes","tag-income-tax","tag-katie-ledecky","tag-olympics","tag-sue-bird","tag-victory-tax"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Olympic Medals and the Tax Man - Don\u2019t Tax Yourself<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.bowditch.com\/estateandtaxplanningblog\/2021\/08\/12\/olympic-medals-and-the-tax-man\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Olympic Medals and the Tax Man - Don\u2019t Tax Yourself\" \/>\n<meta property=\"og:description\" content=\"As the Tokyo Olympics come to a close and the athletes return to their home countries, it may be time for U.S. athletes to sit down with their tax advisor.&nbsp; 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