Should tax prep be an Olympic sport?

A room filled with tax pros, furiously entering data into software, the hushed voice of the announcer crackles with suspense… who will finish first? Who will most quickly and accurately pump out a K-2 and K-3 for a domestic partnership with a partner filing Form 1116, while also placing the temporary partnership number in the correct place on the California return, and getting the fewest diagnostic errors? Oh dear, it looks like one contender was disqualified for pairing socks with flip flops… office attire counts towards the final marks. (Honestly, though, this does sound more interesting than watching skiathlon.)

Tax prep can generate more sweat than a curler sweeping the hammer for a takeout and the win, and the “tax athletes” would have the added bonus of knowing exactly how to treat the income that comes along with their winning medals. 

In addition to their medals, winning U.S. athletes take home per-medal bonuses for their wins: They get $37,500 for gold, $22,500 for silver, and $15,000 for bronze. Depending on their income level (which is in the millions for certain athletes like snowboarders Shaun White and Jaime Anderson), this could mean a tax bill for the privilege of being the best in the world.

However, there is a federal exclusion for the value of any medals or other prizes awarded to Team USA athletes during the Olympic and Paralympic games for those athletes whose adjusted gross income does not exceed $1 million ($500,000 for a married individual filing a separate return).1

But Olympic athletes — most likely — are in the business of being an athlete; their income can be offset by the ordinary and necessary business expenses of things like travel, coaching, and equipment. So, for many Olympians, these expenses could easily offset the $37,500 that comes with a gold medal.

So is it a blessing or a curse that our athletes don’t get paid as much as athletes from other countries? Hong Kong paid its gold-winning fencer in the last summer Olympics $642,000, and in Turkey, a gold medal comes with $383,000 — although so far dangling this number in front of Turkish athletes has yet to net a medal in the Winter games.2

Business people on race track

Intentionally defective trysts and other regrettable mistakes

Today my work is cut out for me. The Quarterly Tax Update® needs a final copy edit, and I’m up for the task. I like the work – focused and quiet. I’ve got my latte, I light a candle and put on classical music, and I’m good to go.

Overall, it looks pretty good. My eyes glaze over a little on stock basis and debt basis of S corporations, but that’s because of the examples. When the examples run for multiple pages, I say a little prayer that everyone knows what they’re talking about.

It takes quite a few hours, but in the end I’m satisfied. Commas, semi-colons, question marks, revenue procedures are all in place. Everything makes sense. Spellchecked.

Spellchecked just in case I miss something. Although sometimes I don’t know why I bother. Some errors are easy to miss, and Spellcheck, as we all know, can be an epic fail.

Take, for example:

  • Statue of limitations (for a good laugh, be sure to check this out:
  • Grandfather debt (try not to get saddled with it)
  • Soul practitioner (the most caring type)
  • Qualified Opportunity Fun
  • Expected business
  • Accepted business
  • Tax perp
  • And let’s not even get started on autocorrect: Like it or not, HSA turns into HAS every time.

We’d love to hear from you, so send us your tax-related typos. We’ll be happy to chuck them out.

“Watch” the California Minute on YouTube

A few fun facts about this week's writers:

Kathryn Zdan, EAKathryn Zdan, EA, spends her non-Spidell hours on photography and watching horror films (and then sleeping with the light on). She also enjoys hiking, biking, and watching foreign films.

Diane FullerDiane Fuller loves to read, cook, and go to Ketchum/Sun Valley, Idaho, as many times as possible during the year with her family including grandkids and dogs.

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