Here is your medal and your tax bill

WTH - U.S. Olympic medal winners have to pay taxes on their medals and prize money? How crappy is that! I was shocked this morning when I heard that U.S. Olympic athletes who win a medal have to pay taxes on both the prize money they receive as well as on the actual medals.

Under U.S. tax law, the athletes must add the value of their Olympic medals and prizes to their taxable income, and are taxed at a rate of 35% by the IRS. According to one report I read, the value of a gold medal is about $675, so an athlete could have to pay about $236 in taxes just on the medal. And . . . AND Olympians who win medals also receive cash payments. $25,000 for gold, $15,000 for silver and $10,000 for bronze. So a Gold medal winner could face a tax on the cash prize of about $8,750. Holy crap - nice way to say "thanks for winning medals for the U.S. at the Olympics!"

I am glad to hear that Senator Marco Rubio of Florida just introduced a bill in the Senate that would exempt U.S. Olympic medal winners from paying federal taxes on their medals and prize money earned in the Olympics. Rubio’s bill, if taken up and passed in Congress, would apply to awards won after Dec. 31, 2011. The bill would amend the Internal Revenue Code of 1986 to eliminate the tax on Olympic medals and prize money won by U.S. athletes. 

So I wonder how much money Michael Phelps paid how much to the U.S. IRS 4 years ago when he won 7 Gold medals? Good thing he has endorsements to help cover that. I wonder how hard it makes life for those Olympians who are in the lesser known sports who probably don't have big sponsors.

Again I say WTH!