Biden takes SALT cap-related tax hit
The former vice president is said to support repealing the $10,000 cap
Geltrude & Company founder Dan Geltrude provides insight into The New York Times’ story on President Trump’s tax records.
Presidential candidate Joe Biden released years’ worth of tax returns on Tuesday, which showed he and his wife took losses from a cap on state and local tax deductions imposed by the Trump administration.
The documents show that in 2019, Biden and his wife Jill Biden paid $94,349 in state and local taxes – $111,717 including state and local real estate taxes.
State and local tax deductions, however, are capped at $10,000.
The SALT limitation eliminated the Bidens’ ability to deduct their property taxes, and limited their federal itemized deductions of state income taxes to $10,000 of the $94,349 paid, Geoffrey Weinstein, special counsel in the Tax, Trusts & Estates Department of Cole Schotz, told FOX Business.
These types of tax bills have caused many high net-worth taxpayers to move to more tax-friendly states, Weinstein added.
Biden is said to be in favor of repealing the $10,000 cap, which was implemented as part of the 2017 Tax Cuts and Jobs Act. It has been criticized harshly by Democratic leaders in high-tax states who claimed it was a politically motivated policy.
BIDEN SAVED BIG BUCKS USING PAYROLL TAX LOOPHOLE
Biden released returns for tax years 2016 through 2019, which showed he and his wife had taxable income of more than $944,700 in 2019.
As previously reported by FOX Business, Biden has come under scrutiny for using a tax strategy to avoid paying hundreds of thousands of dollars in payroll taxes.
Biden released tax returns last year revealing that he and his wife funneled profits from their books and speeches through S corporations.
The loophole is known as the Gingrich-Edwards loophole, and President Obama had called for its end as part of one of his budgets. It essentially allows self-employed people to set up an S corporation in order to avoid payroll taxes – including Social Security and Medicare taxes.
The strategy is legal, and allows people to treat income as company profits instead of a salary.
In 2019, however, the strategy saved the Bidens less than $10,000, as reported by The Wall Street Journal.
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Meanwhile, The New York Times reported details about Trump’s tax returns over the weekend, which showed he paid $750 in 2016 and 2017 – and no taxes for 10 of the prior 15 years. The documents also reportedly indicate that Trump has personal debt worth more than $400 million, and he has come under fire for some of the deductions he claimed.
There has been an ongoing battle for Trump’s tax returns since he has refused to release them.