Why Olympic success could cost Michael Phelps tens of thousands of dollars
There’s no doubt that the star of the Rio Olympics thus far has been Michael Phelps, who added another five gold medals and a silver to his incredible career tally, which now includes 23 golds and 28 medals overall.
Unfortunately for Phelps, all that triumph comes with a price tag: Literally. He could have to pay up to $55,000 in taxes for all his Olympic success.
That’s because the United States Olympic Committee awards athletes’ money for each medal they win: $25,000 per gold, $15,000 for silver and $10,000 for a bronze. And just like all other earnings, those winnings are subject to taxes.
So, if you factor that Phelps’ Olympic successes netted him a cool $140,000, and that he is likely in America’s highest tax bracket (since his net worth is reportedly in the $50 to $55 million range), it means he could be taxed 39.6 percent on the winnings. And 39.6 percent of $140,000, comes out to that $55,000 price tag.
While that number is kind of shocking — $55,000 is no chump change — Phelps' net worth, again, is reported at upwards of $55 million. So chances are that even if Uncle Sam shows up at his doorstep demanding a check, he’ll still find a way to provide for his fiancée and newborn son Boomer.
Plus, according to the Washington Post, Congress is actually considering passing legislation to make Olympic winnings tax free. Especially since so few Olympic athletes actually making any real money, and are without government subsidization (like in many other countries). Aside from athletes like Phelps, a lot of these Olympians actually need the need the cash.
So yeah, Phelps will be fine. But other Olympians sure are hoping they get a break.
