Hi, I’m Bette Hochberger, CPA, CGMA. And today, we’re going to talk about the Olympics because they’re going on right now, and even though there’s a bit of controversy around the games and some of the athletes, I like to bring it back to my favorite topic: taxes.
You may or may not know that the Olympic Committee pays cash awards to the gold, silver, and bronze medal winners, and these prizes are subject to what we refer to as the victory tax. Oof, doesn’t that suck? So you win a gold medal, and you have to pay taxes? In 2016, President Obama signed a bill so that our Olympic champions would no longer have to pay this tax. That was probably really great news for Michael Phelps and Simone Biles, who win, win, win.
Well, this was perfect timing because, in 2017, the Olympic Committee increased the prizes. It’s up to $37,500 for gold, $22,500 for silver, and $15,000 for bronze medals, and there’s no earning limit. So, if you win a hundred medals, you’re going to win a hundred prizes. That’s pretty cool. And the medals themselves also have inherent value because they are made out of metal. And what’s cool is those aren’t subject to those victory taxes either anymore. So, the gold medal this year for the Tokyo Olympics is gold-plated over silver. And if you were to melt it down, it would be worth about $800. And the silver, again you melt it down, worth about $450. And the bronze and this is a little sad, is only worth around $5.
So, there is a catch to this victory tax exclusion. You have to make under a million dollars to avoid the tax, so if you’re a superstar athlete and you get a lot of endorsements, you might end up still paying taxes on your Olympic winnings. So, that’s my discussion for today about the Olympics and taxes. Are you watching? What’s your favorite sport? I know I love to watch gymnastics and our swimmers are doing fantastic. So, drop a comment. What’s your favorite Olympic sport? Who are you rooting for? What’s your favorite country? Because perhaps it’s not the USA; maybe you’re watching from somewhere else. I don’t know. Drop a comment in the comment section below, and we’ll see you next time.
