Olympic Medal Winners Face a Tax Hit
In his third Olympic Performance, Michael Phelps won a total of six medals: four gold and two silver. His performances in the thirtieth Olympiad is sure to bring big financial awards, but his performances are also going to cost him.
Every American who won a medal in the London Olympics will receive cash rewards from the U.S Olympic Committee. Each gold medal winner will receive $25,000, each silver medal winner will receive $15,000 and each bronze medal winner will receive $10,000 respectively. This means when Michael Phelps returns to the states, he will be collecting a healthy $130,000 from the USOC.
However, Phelps will also be taxed for each medal he received. For each gold medal, Phelps will have to pay the IRS approximately $9,000, for each gold, $5,400 for each silver, and if he would have earned a bronze, $3,500.
Soon after stories surfaced about U.S. Olympic athletes facing deep financial hardship, some Washington politicians have offered and supported a bill that would offer the athletes a reprieve.
Republican law makers led by Florida Senator Marco Rubio, and Massachusetts Senator Scott Brown introduced a bill named Olympic Tax Exemption Act last week. The bill has already gained the support of President Barack Obama.
“Our young athletes endure years of grueling training and make enormous sacrifices so they can represent our country on the national stage and make us proud. Our thanks should not come in the form of a giant tax bill from the IRS.” Brown said when asked about the bill.
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