President Joe Biden and Vice President Kamala Harris signed the HR 55, “Emmett Till Anti-Linching Act” in Washington on March 29, 2022.
Samuel Colm | Bloomberg | Getty Images
President Joe Biden and Vice President Kamala Harris Announcement of 2021 tax returnAnd there are some important points for the average American, experts say.
President and First Lady Jill Biden report The jointly adjusted total income is $ 610,702 and pays $ 150,439 as federal income tax at an effective tax rate of 24.6%.
Vice President Kamala Harris and her husband, Douglas Emhoff, Indicated With an income of approximately $ 1.7 million, you will pay $ 523,371 as federal tax at a tax rate of 31.6%.
More from personal finance:
These states are ready to pass the Personal Financial Education Act this year
This is the average tax refund this year — and what you should do with yours
Medicare subscribers can see changes in the rules of their medical savings accounts
Eric Pierre, a Certified Public Accountant based in Austin, Texas, owner of Pierre Accounting, and co-host of the CPA Huddle Podcast, said:
For example, Harris missed the opportunity to save payroll tax by earning more than $ 450,000 in total income as a writer in 2021 and building a business as an S corporation.
After paying the employee’s shareholders Reasonable compensationOwners can also receive a distribution without the combined social security tax and Medicare tax of 15.3%.
“When she’s absent, she’ll probably do much more than her husband,” he said, adding how S Corporation would offer significant savings in the future.
Emhoff, who received nearly $ 600,000 in partnership revenue in 2021, could also miss an opportunity, Pierre said.
Bidens has reduced self-employed tax bills by receiving wages through a company configured as an S corporation. This has resulted in significant savings for the couple. Book trading and speech gigs for 2017 and 2018..
Sharif Muhammad, founder and CEO of Unlimited Financial Services in Somerset, NJ, further reduced claims by adding a 401 (k) or SEP personal annuity donation to his retirement savings. It says it can.
Overall, both earnings show a modest tax cut strategy compared to civilians with similar incomes, Pierre said.
“They seem to be conservative in the way they pay taxes,” Muhammad said.
In addition, Bidens instead makes a significant tax withholding from W-2 revenue. Estimated tax payment He pointed out about their self-employed income.
“It’s a kind of set-it-and-forget-it-type approach,” Muhammad said.
Both couples may also consider inheritance tax planning strategies, especially with tax cuts and provisions from the Employment Act. Scheduled for sunset in 2026Said Pierre. The current exemption for federal inheritance tax will be over $ 12 million per person in 2022, but will return to an estimated $ 6 million.