Olympian Economics: Gold Medal Bonuses and Tax Bills for Athletes
With glory comes a price. American athletes took home a record 121 medals from the Rio 2016 Olympics, including 46 golds. But it's not all profit, sunshine, and rainbows. The tax on winning even a single gold medal could be close to $10,000.
So how much could multiple medal winners end up paying in taxes on the medals themselves and their bonuses? And is there any relief on the horizon?
Tax Facts and Figures
As it stands, U.S. medalists must pay taxes on both the medals they earn and the bonuses they receive per medal. The U.S. Olympic Committee awards athletes $25,000 for each gold medal, $15,000 for silver, and $10,000 for bronze. The value of medals can vary, and Rio's are some of the largest -- a gold medal is worth about $564, silver about $305, and bronze (because it is made of mostly copper) is only worth about $4 so it's not taxed.
The tax rate on medals and bonuses can vary as well. For instance, most Olympians are amateurs, or just getting by on endorsement deals. And while this can put famous medal hoarders like Michael Phelps and Simone Biles into the upper tax echelons, many Americans coming home from Rio aren't earning that kind of money. Biles took home around $135,000 in medals and bonuses alone, along with about $2M in endorsements, bringing her tax bill to an estimated $43,560, based on the highest U.S. income tax bracket.
Future Reform
Whether Biles, or any of the other American medal winners will have to pay taxes on their prizes may change soon. Senator John Thune of South Dakota introduced legislation early this year that would exempt Olympians and Paralympians from being taxed on "the value of any medal or prize money received on account of competition in the Olympic Games or Paralympic Games." The Appreciation for Olympians and Paralympians Act would also be retrospective, meaning it would cover medals and prize money from the games in Rio. And for some athletes that could mean tens of thousands in tax relief.
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Related Resources:
- For US Olympians, Gold Medals Come With a Hefty Tax Bill (BBC)
- Sochi Olympics: What's the Tax on Medals for U.S. Athletes? (FindLaw's Tarnished Twenty)
- Win an Olympic Medal, Expect a Big IRS Tax Bill (FindLaw's Tarnished Twenty)
- Lindsey Vonn Owes $1.7M in Taxes (FindLaw's Tarnished Twenty)