Uncle Sam still comes for you, even if you're winning Olympic medals in the country's name.
Olympic medals and the bonuses—$25,000 for a gold medal, $15,000 for silver and $10,000 for bronze— that the U.S. Olympic Committee awards athletes for landing one of the top spots all count as taxable income to the IRS.
Victory bonuses and medals are seen by the IRS as being like any other prize winnings, such as lottery, casino or game show winnings and, thus, are taxable.
The tax bill might not be as big as you'd imagine thanks to the medals' actual monetary value, the basis on which they are taxed, being so low. According to Money's own estimates the scrap value of a gold medal is about $501, depending on the portion of actual gold used to make the medal and current price of gold. Silver medals have even less value, about $300, and bronze medals, being a mix of copper and zinc, have little value.
Athletes can offset their potential tax hit with the hundreds of thousands of dollars in expenses they've likely racked up for training and traveling, if they treat their sport as a profession. Last Olympics, the New York Times reported that Missy Franklin's parents spent $100,000 a year on her swimming expenses.
There are many who dislike that Olympic athletes must pay taxes for a victory.
Sen. Chuck Schumer (D-N.Y.) has referred to this issue as “the victory tax" and has called on the House to pass legislation exempting Olympic winners from paying income taxes on their medal earnings. Sen. Marco Rubio also proposed a bill in 2012 to exempt Olympians from the tax. Even President Obama has said he's in favor of an exemption.