Biden, Harris publishes tax returns for 2020. A few details are worth mentioning, say tax experts
President Joe Biden addresses the Ford Rouge Electric Vehicle Center in Dearborn, Michigan on May 18, 2021.
Nicholas Comb | AFP | Getty Images
President Joe Biden and Vice President Kamala Harris released their 2020 tax returns on Monday, restoring the White House’s annual tradition.
President and first lady Jill Biden reported an adjusted gross income of $ 607,336, making it in the top 1% of applicants according to IRS data. The Bidens paid $ 157,414 in federal taxes, a rate of 25.9%.
Harris and second gentleman Doug Emhoff, an attorney, reported adjusted gross income of $ 1,695,225. They paid $ 621,893 in federal taxes, a rate of 36.7%.
Biden and Harris also shared financial stats for 2020.
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The Bidens revealed joint assets valued at $ 1.2 million to nearly $ 2.9 million, while Harris and Emhoff’s assets ranged from $ 3 million to nearly $ 7 million.
“Overall, they’re pretty clean,” said Karl Schwartz, certified financial planner and certified accountant with Team Hewins in Boca Raton, Florida.
While the returns didn’t reveal any financial bombs, tax experts say a few details are worth mentioning.
While much of the Biden’s income came from pensions, they received $ 200,000 in wages through their S-Corporation company.
“There are ways to lower your taxes when you have your own business like this,” said Eric Pierre, an Austin, Texas-based accountant and owner at Pierre Accounting.
These so-called pass-through businesses can allow owners to avoid self-employment taxes for a portion of their business income. Biden’s S-Corporation made significant tax savings in 2017 and 2018.
Most of Harris and Emhoff’s income came from Emhoff’s work as a partner in his law firm DLA Piper.
With incomes well above the $ 400,000 threshold, both pairs of Biden’s proposed tax hikes could be affected.
However, capital gains levies may be less of a concern. Neither of the returns have generated significant investment returns, Pierre said.
Another notable detail is how much each couple spent on state and local taxes, Pierre said.
Overall, they’re pretty clean.
Auditor at Team Hewins
The Bidens had $ 90,289 in state and local taxes, or SALT, but couldn’t claim a deduction for more than $ 10,000.
The same $ 10,000 limit applied to Harris and Emhoff, who raised a whopping $ 280,421 in state and local taxes.
This so-called $ 10,000 SALT deduction cap was a short-term addition to former President Donald Trump’s 2017 tax overhaul.
Before the Tax Reduction and Employment Act, applicants were able to deduct their full SALT amount, which is a massive write-off for areas with high taxes.
“That’s a pretty substantial deduction that is being taken away,” Schwartz said.
The government has not called for an end to the $ 10,000 state and local tax cap in the Trump era, but the first and second families would benefit greatly from the change.
The lifting of the cap on the SALT deduction of $ 10,000 has become a sticking point among lawmakers in high-tax countries and threatens to derail Biden’s American family plan.
However, lifting the SALT withdrawal cap cannot help most Americans.
Less than 10% of households would benefit, with 96% of the tax cut going to the top 20%, according to the Tax Policy Center.