Go for the Gold — and Pay the Tax Man

With the London Olympics in full swing, many Americans are glued to their televisions, cheering on the gold medal-winning likes of Michael Phelps, Missy Franklin and Virginia Beach's own Gabby Douglas. But do they realize the tax implications of those athletes' Olympic glory?

Americans for Tax Reform (ATR) appears to be the original source for a story that's gone viral in Olympic- and tax-related media. The advocacy group calculated the tax bills for the honorariums medalists receive ($25,000 for gold, $15,000 for silver and $10,000 for bronze). The ATR tabulated the tax hits on those prizes as $8,986 for gold, $5,385 for silver and $3,500 for bronze.

Weekly Standard blogger Jonathan V. Last ran the numbers for Franklin, a high school student from California who won swimming gold in the 4x200-meter freestyle relay and the 100-meter backstroke and bronze in the 4x100-meter freestyle relay. (She's got three events left on her schedule). Last calculated that Franklin already owes nearly $14,000 in taxes for her medals, and she could hit the $30,000 mark with more golds.

There's a way for Franklin to get around the tax bill, and she might have to do it to keep competing as an amateur. If she follows through on her plan to compete in college, she'll have to decline the prize money in order to maintain her eligibility.

The ATR also noted that there's a more modest tax on the medals themselves based on commodity prices. The tax hit is $236 for a gold medal, $135 for silver and $2 for bronze. (Those numbers are included in the figures provided by the ATR.)

Sen. Marco Rubio (R-Fla.) proposed a bill on Wednesday that would exempt athletes from the federal tax.