There has been a lot of chatter lately about the taxes that U.S. Olympic athletes will have to pay if they bring home gold, silver or bronze from their time at the 2012 London Summer Olympic Games. Currently, the U.S. Olympic Committee awards cash prizes to medalists: $25,000 for gold, $15,000 for silver, and $10,000 for bronze, and Team USA athletes have won over 60 medals and counting so far. This interesting and timely tax issue recently gained attention when anti-tax advocate Grover Norquist’s advocacy group, Americans for Tax Reform, published information in a blog estimating that medal winners could owe “up to $9,000 to the IRS” for their prize winnings. That figure may not be entirely accurate say some tax professionals, but in the end, there is no doubt that Olympic winnings are indeed taxable.
According to the media, The White House said Monday, August 6th that President Obama would sign a bill to give tax breaks to Olympic medalists on their cash awards. “If it were to get to his desk he would support it,” said White House spokesman Jay Carney during the press briefing Monday. You can read more about that here.
So, to add something new to the conversation, here’s another interesting angle from our tax professional, Director Dave R. Barrett, CPA.
“Suppose a person’s home is located near a US Olympic venue (- e.g., Lake Placid, NY). If that person rents his home out for a two week period during the competitions – say for $25,000 – the rental income is exempt from income tax. (IRC Sec. 280A(g)(2)). How is that situation more deserving of a tax break than a gold medal winner’s $25,000 honorarium?”
Well, it remains to be seen what will happen if “Olympic tax reform” takes place, but just another interesting point of conversation that can take place while millions of Americans watch Team USA at the Olympics!
Plus, if you have a minute, check out this amazing video, a superb graphical comparison by the New York Times. Evolution of the human race, literally. Very cool!