A Slopestyle Sweep for the U.S.A!! Until a week ago, I had little idea what "Slopestyle" was (an extreme form of skiing or snowboarding). That's the part of the Olympics that so many of us find so enjoying - watching our country compete against other nations in a variety of sports, many of which we tend to think of only when the next Olympiad comes around. As the current medal count stands, the United States is second with 12 medals, trailing Norway, a perennial winter Olympic powerhouse, by one medal. I can't begin to imagine the joy of winning an Olympic medal - years of sacrifices and dreams finally realized - along with the realization that the winner must now pay taxes for winning that medal.
It's not a well-broadcasted fact that medal winners are on the hook for taxes, but for U.S. athletes, it is indeed true. You see, each medal winner is also awarded a monetary prize by the U.S. Olympic Commission - $25,000 for gold, $15,000 for silver, and $10,000 for a bronze. That money is then considered earned income abroad and is subject to taxation by the IRS. Congratulations, medal winners!
There is a great breakdown here of what the tax implications can be for some of the more well-known and well-sponsored athletes who've won gold medals in the past - as much as $9,900 for a gold this year in Sochi. For many of those athletes, the taxes are a drop in the bucket of what they'll earn this year and in the future, but for many Olympians, it's a big deal.
Consider that many athletes train year round for their sports, and are unable to work full-time jobs to make ends meet; many receive stipends from the U.S. Olympic Commission or the governing bodies of their individual sports, but it's not much. Many of the less popular Olympic sports such as the Luge and Ice Dancing aren't huge revenue generators, and the athletes who choose to compete in these sports often make less than $20,000 per year in income - shelling out taxes on a gold medal is no drop in the bucket for them!
You'd think that Uncle Sam might cut these athletes a break - after all, they're representing our country on the world stage, but that isn't the case - yet. Texas GOP Rep Blake Farenthold re-introduced legislation that would make Olympic athletes exempt from paying taxes on medals and Olympic winnings. We'll see if it makes a difference, but, for now at least, the price of Olympic gold doesn't just include blood, sweat, and tears - there's a few dollar signs attached as well.
Chuck Wade, Financial Advisor
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).