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Some Olympians have to pay taxes on their medals

Olympic athletes who earn more than $1 million a year still have to pay for their gold, silver or bronze.

TOKYO, Japan — Victory at the Olympics used to automatically mean there was a tax bill for all medal-winning athletes in the U.S. waiting for them at home. 

The U.S. Olympic Committee awards athletes that bring home the gold, silver or bronze. In previous years, the committee paid athletes $25,000 for winning gold, $15,000 for silver and $10,000 for bronze medals. 

And, those cash prizes were subjected to tax. The so-called "victory tax" used to be collected for U.S. Olympians based on the medals they won and brought back from Olympic games.

This meant that Olympic champions such as Michael Phelps and Simone Biles were subjected to up to $55,000 and $43,000 in taxes, respectively, from the medals they won in the 2016 Rio Olympics, according to the BBC.

All that changed in 2016. President Barak Obama signed a bill into law that prohibited the IRS from collecting taxes from those awards, ESPN reports

The tax will still apply to high-profile athletes who earn at least $1 million a year, according to ESPN. 

Starting in 2017, the U.S. Olympic Committee said it would increase its awards for medal-winners. That means for the 2020 Tokyo Olympics, U.S. Olympic athletes will receive $37,500 for each gold, $22,500 for silver and $15,000 for bronze medals. 

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