Why do medal winners have to pay taxes

You may be wondering just how much a gold medal from the Olympics is worth these days. But older medals, especially those with historical significance, could sell for a much larger amount of money.

For example:. As a result of the law, the rules are clear that an Olympic athlete won't be taxed on the value of an Olympic medal or any prize money given to them by the USOC. However, the rules are not so clear when it comes to the taxation of money given to Olympic athletes to cover expenses. For instance, are gifts given to an athlete by friends or family taxable? Over the years, we have seen many Olympic athletes relying on family and friends to help pay for basic needs while training and competing in the Olympic events.

For example, the mother of a two-time gold medal-winning U. However, as long as the money is given to the athlete voluntarily and without any strings attached, they can claim the funds as a gift. This means the athlete can exclude the money from gross income.

What if an athlete needs money and uses crowdfunding for help with his or her Olympic pursuit such as needing money for equipment or training? Crowdfunding allows strangers to give money to athletes who are asking for the funds directly. This year, several athletes asked for crowdfunding help to get to the Tokyo games. Critics like Sen. Taxable income also cannot include the value of any medal, the law said. Even among athletes, the income tax exclusion on Olympic-related prize money is a distinction, he noted.

Portland Trail Blazers point guard Damian Lillard is another member of the team. Each sport determines its own eligibility rules when it comes to amateur or professional status, the USOPC spokesman said. The pandemic caused millions of people to work remotely.

In the process, these workers may have learned a hard lesson this past tax season about the varying rules for when state- and city-level income tax obligations kick in.

The mix of rules is overly complicated, say critics. But this is what professional athletes with lots of road games having been facing for years when their tax professionals prepare their returns. Athletes like Phelps who are presumably higher-income earners thanks, endorsements are part of the top tax bracket and paid That means athletes who came out on top multiple times had for it — literally. Product Reviews. He noted that most countries subsidise the cost of training for the Olympics and don't charge their athletes for winning.

Most US athletes must pay for their own training and few can sustain a professional living on their athletic winnings alone. The US Olympic committee pays for health insurance and stipends for only a small number of US athletes. This is not the first attempt at changing the taxation rules around Olympic victories.

In , Florida Senator Marco Rubio introduced a bill to prevent Olympic athletes from being subject to taxes on their winnings at the London games. How US teenager shot to Olympic fame. Why Simone Manuel's gold medal matters. Image source, Getty Images. What are they taxed on?