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Thursday, August 18, 2016

Olympians Pay Tax on Medals

Olympic Medalists Pay Tax on Medals 

Olympic medal winners must report the value of the medals as income on their US tax returns.  Gold medals are worth an estimated $600, silver medals an estimated $300 and bronze medals a mere $4. In addition to the medals, Olympic athletes also receive a cash prize.  Gold medal winners receive $25,000, silver medal winners receive $15,000 and bronze medal winners receive $10,000.  Uncle Sam wants his share of the winnings.  
good tax accountant can possibly reduce the winner's tax burden.  If the athletes consider their Olympic career a business, they can deduct certain business expenses.  Possible deductions may include the cost of training, athletic equipment and travel, to name a few.  If the athlete considers his or her sport a hobby, he or she may be entitled to deduct expenses as Miscellaneous Itemized Deductions on Schedule A.

Sandra G. Johnson, CPA
August 18, 2016