Personal Finance, Taxes

A Sochi Olympic Gold Medal is Worth $25,000, But Can Mean a $10,000 Tax Bill

winter Olympic gold silver and bronze medals
How much is an Olympic gold medal from Sochi, Russia worth? The gold medals aren’t pure gold (if they were, they would be worth close to $21,500 each), but they are worth approximately $566 when their metal content is taken into account .(This doesn’t take into account any labor or other expenses needed for creating the medals) Each Sochi gold medal contains 525 grams of silver with an additional 6 grams of gold. The Sochi silver medals weigh in with 525 grams of silver and a melt value of just under $325. The Sochi bronze medals are created out of copper with a zinc and tin mix, and they have a melt value of just over $3. While the value of the metal in the medals might not be worth nearly as much as you might expect, each medal won comes with a cash bonus for US athletes.

When a US athlete wins a gold medal at the 2014 Winter Olympic games, the US Olympic Commission gives a cash reward to go along with the medal. Medalists receive a $25,000 bonus for a gold medal, a $15,000 bonus for a silver medal and a $10,000 bonus for a bronze medal. While this may seem like a nice bonus, it doesn’t come close to what some other countries pay. A gold medal in Kazakhstan is worth a cool $250,000 bonus, and a Russian gold medalist this year will get more than $100,000.

The US medalist won’t be able to spend all of their bonus, however, because Uncle Sam will claim a portion of it. Unlike many other countries, the US considers the Olympic medal bonuses as earned income in a foreign country, which is considered taxable income by the IRS. How much each medal winning athlete will need to pay in Federal taxes depends largely on their income level. They may also be liable for state taxes if they live in a state with an income tax.

When it comes to the star athletes who already earn big salaries from endorsements and other related business opportunities like Shaun White and Bode Miller, they will likely find themselves in the top federal tax bracket of 39.6% for any medal bonus money they earn. That means if they win a gold, approximately $9,900 of the $25,000 will go to Uncle Sam. A silver medal will see $5,940 from their $15,000 bonus go to the IRS, while $3,960 of the $10,000 bonus will disappear for any bronze medals they happen to win.

Those American medalists that have their income fall into the middle range will see their medal bonuses taxed at 28%. In this case, $7000 would be taken away by the IRS for a gold medal, $4,200 for a silver medal and $2,800 for a bronze medal. For those athletes whose income falls into the lowest bracket, the tax cost will come to $2,500 for a gold, $1,500 for a sliver and $1000 for a bronze.

There have been bills introduced by congress that would make the Olympic medal bonuses tax free, but none of them have even come up for a vote, let alone pass. President Obama has indicated if such a bill ever came to his desk, he would both support it and sign it.

6 thoughts on “A Sochi Olympic Gold Medal is Worth $25,000, But Can Mean a $10,000 Tax Bill

  1. I think this article was really helpful. I am writing a report on the 2014 Olympics and the medals that go with it so I found this helpful.

    anna tompson

  2. Considering we are the most powerfull nation in the world, we are dropping pennies for these US Olympic athletes that pour their souls out to win the Gold, Silver or Bronze medal. Then get chump change for their efforts? And then to be kicked in the ass with a tax bill on the bonus money and the value of the medal as well. They will end up with almost nothing afterwards.

  3. Mendalists should be compensated tax free for their efforts, dedication and contribution to this wonderful Country… Come on Canada….. Our athletes are worth it…..

  4. The only people getting taxed this heavily are those in the top tax bracket. Those specific people don’t give a damn about anything but the gold medal itself. Don’t pretend that money is an object here. No Olympic athlete is out there for the money

  5. Why is it that the billionaire NFL club can operate as a non-profit. Similarly that gross exploiter of “student-athletes”, the billionaire NCAA can also operate as a non-profit and effectively rip-off the taxpayer. Yet when an Olympic athlete wins a medal, makes America look good, the taxman is there to take a chunk? Where is the fairness?

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