by Colin Campbell The Baltimore Sun:
When Michael Phelps won his five gold medals and one silver in the Rio Olympics, he earned $140,000 in winnings.
But that’s before tax.
Phelps, 31, could be forced to pay nearly 40 percent of that money, or up to $55,440, in a “victory tax” to the Internal Revenue Service, according to the Americans for Tax Reform.
The U.S. Olympic Committee awards its medalists $25,000 for a gold medal, $15,000 for silver, and $10,000 for bronze. The IRS treats those winnings as income, so winners must pay taxes on them.
While Phelps’ finances aren’t public, he has earned an estimated $94 million in endorsement deals over his career and has an estimated 2016 net worth of about $44.3 million, according to MoneyNation.com. Those endorsements put him in the top tax bracket.
The estimates are based on endorsement deals companies have struck with similar high-profile athletes and the exposure of the endorsements. A representative for Phelps did not respond to a request for comment.
Unlike professional baseball or football, swimming doesn’t come with long-term, multimillion-dollar contracts.
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