So as of this writing, swimmer Missy Franklin-who's a high school student-is already on the hook for almost $14,000. By the time she's done in the pool, her tab could be much higher. (That is, unless she has to decline the prize money to placate the NCAA-the only organization in America whose nuttiness rivals the IRS.)

Well, she's only on the hook for $14k if she already made $390k in endorsement money this year to push her up into the 35% bracket, in which case the NCAA issue is moot.

Of course whoever wrote TFA is a talentless ignorant chucklefark trolling for page hits so I wouldn't expect him/her to figure that out without help.

Hopefully they pay taxes on the medals themselves too because they are at least partly precious metals (mostly silver except the bronze).

According to some random website (at current exchange rates):
Gold $618
Silver $334
Bronze $3

Pay up biatches!

NewportBarGuy: pion: I do disagree with having to pay a tax for the medal.

So do I. They are also acting as special ambassadors for the US and they get held to an incredibly high standard. Get the IRS or congress to write up an exemption. I'm pretty sure that's one of those things that would actually get passed quite quickly because it actually makes sense and sh*t. Or, they'd attach an abortion bill to it or something.

Or a gun control bill...

bluefoxicy: NewportBarGuy: It's income. It's taxed as income. Show me something to make it tax exempt and I'll sign it. Jesus Christ. Have you nothing else more petty to b*tch about?

Actually, if you take a job in Korea, Japan, Germany, France, etc ... you work a 40 hour week, you get a paycheck , you're a US Citizen though ... the US doesn't tax you.

That's right: you don't pay income tax on jobs worked in a foreign country.

That's *sorta* true.

The United States requires that you declare that income and they WILL tax you on it - it's just that there is something like a $90k deduction against it.

I work in Ireland, but I earn less than 90k USD - so I don't actually pay Uncle Sam - but I do have to file. And if I win 10 million euro in the lotto here I *do* have to pay taxes on it. But, instead of paying Uncle Sam - I get to pay the Irish government. And it doesn't take very much to reach the 51% tax bracket here. Taxes are complicated though - so it's not as simple as 'I pay 51% in income tax' but once you reach a certain amount, each addition euro you earn is taxed at 51% and it's a relatively low amount. On top of that - you'll be paying 20% sales tax and a whole slew more in hidden taxes for things like buying gas and driving (not that the US doesn't have similar tax laws - but the amounts tend to be much lower).

You can denounce your US citizenship - but even that is iffy. If the government decides you are doing it for tax reasons - they can say no. I don't know how that works exactly.

You also need to fill out separate documents showing the balances of every bank account and/or investment with more than 10k USD in value - presumably to help track down off-shore tax evasion things.

Ironically, for all this - I get pretty much none of the tax benefits an American would get and pretty much none of the tax benefits an Irishman would get.

// Sucks to be me

Nice inflammatory article highlighting that American citizens must pay tax on earned income. I think Missy Franklin is great. But she has to pay her taxes just like me and I'll bet she has no problem with that.

what_now: So she's in HS and she's earned $65,000 in the last few days, and she has to pay taxes on it?

And this..this is an outrage?

Athletes, much like the wealthy, are better than regular people and shouldn't have to pay taxes.

I hope Rmoney jumps on this bandwagon.

ehh all they gotta do is pop out some kids and the government will send them a check

Tillmaster: You do realize that Olympic athletes are amateurs, not professionals. It's kind of the whole point.

What decade are you posting from? How did they get the Internet there? Al?

Am I the only one who thinks that 40% income tax is a bit high?

happyleper: Carousel Beast: LarryDan43: /On topic, it's income and should be taxes as such, though she should contest what the IRS values the actual medal at (based on the linked article yesterday)

FTFA: "For instance: Americans who win bronze will pay a $2 tax on the medal itself. But the bronze comes with a modest prize-$10,000 as an honorarium for devoting your entire life to being the third best athlete on the planet in your chosen discipline. And the IRS will take $3,500 of that, thank you very much. There are also prizes that accompany each medal: $25,000 for gold, $15,000 for silver, and $10,000 for bronze."

The tax has nothing to do with the value of the medal -- it's based on the cash prize that comes with it.

Yeah, reading is hard.

Oh farking please. What a moron. The IOC may wish to call the prize money an honorarium, but it is a prize. it's Income and just like anyone else's income, it should be subject to tax. Michael Phelps has one 16 Olympic gold medals alone and picked up $400,000 in prize money from them. Cough it up buddy-boy; the rest of us have to. Phelps is a professional swimmer. This dude is talking out is ass on the amount of tax they have to pay.

well, unless you also want to exclude income on the prizes you get when you guess the correct retail price of those vaginal sand-removers on Price is Right, then tax on prizes it is.

"If a taxpayer wins a sweepstakes or receives a prize from a competition, these would be taxable income to the taxpayer. The amount included in income would be the fair market value of the items at the time they are received."
http://www.legalmatch.com/law-library/article/prize-and-award-taxes.h t ml

/Welcome to the Republican Party, Missy. We have BBQ.

Nuclear Monk: Do they actually PAY that tax, or is that just the initial deduction that then ends up probably getting recouped when taxes are filed and adjusted gross incomes are considered. My bonus checks always have huge chunks of money withheld, but I end up getting a big chunk back after tax filings.

Considering everything she could put as a deduction, I'm guessing she doesn't pay anything.

Raging Thespian: sufferpuppet: If that's income then all the gym fees and equipment over the years were her business expenses. She'll have a one hell of a deduction for those.

Hopefully, this. Does anyone know if this is true?

One would assume she has been a dependent of her parents and they were claiming deductions as allowed. As for business expenses... one must have a business of course. And I'd bet you 47 nickels that a metric ass ton of her equipment and facilities fees are donated.

Tillmaster: You do realize that Olympic athletes are amateurs, not professionals. It's kind of the whole point.

no they are not. that's kind of whole point. they get income for the medals. that income, like most income, is taxable. thus, they pay taxes on the income. it's how an income tax works.

/amateur athletics is a snobbish relic of a backwards ass time filled with stuck-up douchenozzles

bluefoxicy: That's right: you don't pay income tax on jobs worked in a foreign country.

US citizens do. There's some credit for foreign taxes you pay, but US citizens pay income tax on worldwide income even if they have never set foot in the US (for example, Canadian residents, born in Canada to US parents -- still owe US taxes on all their income). And if you give up your citizenship in an attempt to avoid paying taxes you are likely to be bared from entry to the US for a decade or so.

IRS link

If Rafalca medals how will Mr Money Tit get out of paying. That'll be interesting to see.

tricycleracer: what_now: So she's in HS and she's earned $65,000 in the last few days, and she has to pay taxes on it?

And this..this is an outrage?

Athletes, much like the wealthy, are better than regular people and shouldn't have to pay taxes.

I hope Rmoney jumps on this bandwagon.

When you innovate or succeed, you should be rewarded by a reduction in the amount of your income seized by the state. When you rely on the money seized from others' hands to support your lazy lifestyle, you should have to contribute more back. In fact, if you're not investing your savings to help Create Jobs and Grow the Economy, you should have to pay extra, to make up for your financial slacking.

/this is what rmoney probably believes

The whole TAX system is a scam. There are two types of people as far as taxes are concerned. Those that get paychecks/prizes/etc. or those that have their wealth increased. If you're earning a wage through paychecks/prizes, you're screwed. If you're wealth is earning you money, then you don't have to worry about paying your fair share. That is how you can earn $33 million and only pay 13.8% in tax.

The taxes are withheld at the maximum 35% rate, but when you file your taxes, on your next tax return, normal tax rates are applied to it based on your marginal rate. Bonuses and prizes are always withheld at the maximum rate

Missy Franklin, being a teenager, dependent of her parents, won't get to claim herself as a dependent, but will get to deduct the standard deduction. Her AGI is about $44,050 ($50000-$5950). According to the 2012 tables, she will pay $6805 in taxes. Which is about 13%

corronchilejano: Am I the only one who thinks that 40% income tax is a bit high?

I've never met anyone who paid that much in income tax.

Marine1: ZZ9 Plural Z Alpha: They have to pay taxes on income?
[lh4.ggpht.com image 512x401]

Well, it is kind of stupid. I'm not for the tax being that big on it.

Its treated as "other income" on your 1040 which carries a high tax rate due to no social security/medicare/etc withholding. Many casinos automatically withhold 30% of large gambling winnings for you. In general 30% is about what you pay at the end of the day, but it depends upon your individual tax bracket.

corronchilejano: Am I the only one who thinks that 40% income tax is a bit high?

Nobody pays a 40% "income tax" in the United States. IF the article's numbers are correct (and given that it is by a conservative making a conservative argument, they most likely aren't), it's probably because it's not taxed at the same rate as normal income because it's prize money or something like that.

bluefoxicy: NewportBarGuy: It's income. It's taxed as income. Show me something to make it tax exempt and I'll sign it. Jesus Christ. Have you nothing else more petty to b*tch about?

Actually, if you take a job in Korea, Japan, Germany, France, etc ... you work a 40 hour week, you get a paycheck , you're a US Citizen though ... the US doesn't tax you.

That's right: you don't pay income tax on jobs worked in a foreign country.

JUST. STOP.

quit giving advice on something you know nothing about.

/foreign earned income exclusion is $92,900 for 2011
//That's right, $92,901 in foreign income, you pay tax on $1

JC

corronchilejano: Am I the only one who thinks that 40% income tax is a bit high?

No. Thankfully that rate doesn't exist in the US tax code so you can take a break for the rest of the day and not worry about it.

Taxing prize money I get, but taxing the medal itself is just plain stupid.

Let's just tax every little league trophy too, while we're at it.

Jesus, this country sucks more every day.

weiserfireman: The taxes are withheld at the maximum 35% rate, but when you file your taxes, on your next tax return, normal tax rates are applied to it based on your marginal rate. Bonuses and prizes are always withheld at the maximum rate

Missy Franklin, being a teenager, dependent of her parents, won't get to claim herself as a dependent, but will get to deduct the standard deduction. Her AGI is about $44,050 ($50000-$5950). According to the 2012 tables, she will pay $6805 in taxes. Which is about 13%

yes but if people actually understand the concept of marginal rates they couldn't write worthless farking articles biased on myth and fiction.

UNC_Samurai: There's a monetary prize for winning a medal? Kinda puts the last nail in the "amateur" coffin.

You happen to catch the story about these guys defending the idea that they should be paid to kick ass in the Olympics?

TravelingFreakshow: Taxing prize money I get, but taxing the medal itself is just plain stupid.

Let's just tax every little league trophy too, while we're at it.

Jesus, this country sucks more every day.

The tax on the medal probably isn't income tax, more than likely it is an import tax

weiserfireman: The taxes are withheld at the maximum 35% rate, but when you file your taxes, on your next tax return, normal tax rates are applied to it based on your marginal rate. Bonuses and prizes are always withheld at the maximum rate

Missy Franklin, being a teenager, dependent of her parents, won't get to claim herself as a dependent, but will get to deduct the standard deduction. Her AGI is about $44,050 ($50000-$5950). According to the 2012 tables, she will pay $6805 in taxes. Which is about 13%

Careful. Your factual information is robbing people of their misguided outrage fuel.

The medals weren't earned in the USA. I don't agree with a policy of forever taxing an American no matter where he goes.

And Tim Geithner being the tax collector is insane, since he is by far the most famous tax cheat in our government bureaucracy.

Repeat from 2008. Oh wait, Bush was in the WH. It wasn't covered by the Weakly Stupid

bluefoxicy: NewportBarGuy: It's income. It's taxed as income. Show me something to make it tax exempt and I'll sign it. Jesus Christ. Have you nothing else more petty to b*tch about?

Actually, if you take a job in Korea, Japan, Germany, France, etc ... you work a 40 hour week, you get a paycheck , you're a US Citizen though ... the US doesn't tax you.

That's right: you don't pay income tax on jobs worked in a foreign country.

But only if you are out of the US for 330 days out of the year...

MindStalker: In general 30% is about what you pay at the end of the day, but it depends upon your individual tax bracket.

Most Americans don't pay anything close to 30% in federal taxes. The effective federal tax rate for families in the middle income quintile is around 14.3%.

Link

As others have said, it's income. And since many Olympians parlay their fame into fairly lucrative careers, I'm not too worried about them being impoverished by taxes. Especially when they're 17 years old and still living with their parents.

But I'm sure this story will get all kinds of "taxes are theft" idiots to chime in.

NewportBarGuy: It's income. It's taxed as income. Show me something to make it tax exempt and I'll sign it. Jesus Christ. Have you nothing else more petty to b*tch about?

Jesus, switch to decafe already.

Imperialism: Alternate headline: Income Taxed.

If Franklin turned pro and accepted sponsorship money, she'd be taxed on that plus prize money won. Because that's income. It gets taxed.

But, um, outrage

But can she deduct expenses?

Olympic training costs massively more than these cash prizes.
There isn't a American on that team that's going to be left in the lurch due taxes.

UNC_Samurai: There's a monetary prize for winning a medal? Kinda puts the last nail in the "amateur" coffin.

Most countries, for decades, have had cash/cars/homes etc for winners of Olympic medals. It isn't new.

TravelingFreakshow: Taxing prize money I get, but taxing the medal itself is just plain stupid.

Let's just tax every little league trophy too, while we're at it.

Jesus, this country sucks more every day.

We already do.

When the league manager or head coach or whoever buys the trophy from some middle man who got them in bulk from a factory in China - the 'government' collects sales tax on it. It's an oversimplification though - as there would be all sorts of taxes local/state/federal involved in the business that imports the items, possible import duties/fees, taxes on the warehouse the stored them, taxes on the vehicle that distributed them, taxes on the middle man's business that buys them, taxes on his warehouse, etc, etc, etc....

Wait a minute. I thought we wanted to tax wealth, not income!!??!

Wendy's Chili: She should have medaled in dressage if she didn't want to pay taxes.

I think the horse is on the hook for the taxes in that event.