By Andrew Schwartz, CPA
Last month, Presidential Candidate Mitt Romney released his 2011 and 2010 tax returns to the public.? You can download a complete copy of these federal tax returns at:
Here is? what I observed upon reviewing his returns:
- Mitt Romney reported gross income of just about $21 million for each of these two years.? A little more than 50% of this income was from long-term capital gains and qualified dividends, which are taxed at the maximum rate of 15% for the regular tax calculation.??
- With respect to his self-employment income, Mitt Romney did not appear to be very concerned about minimizing his tax burden.? Take a look at the Schedule C each year, and while he did not claim any expenses against his Author/Speaking Fees income of $110,500 in 2011, he did claim his agent commission of $39,756 and advertising expenses of $9,000, for a total of $48,756, against his gross self-employment income of $528,871in 2010. Apparently, he decided not to claim any other expenses, including the home office or automobile mileage, that many self-employed individuals claim on their Schedule C each year. Mitt Romney also did not contribute to a retirement plan either year based on his net self-employment income, which would have reduced his taxable income.
- If you look at line 45 of his tax return for both year, you’ll see that he paid a ton of Alternative Minimum Taxes each year.? Based on these returns, his AMT was $224,425 in 2011 and $232,989 in 2010.? While most taxpayers with income greater than $1 million pay no AMT, people with substantial long-term capital gains and qualified dividends end up paying this tax due to how this tax calculation works.
More tomorrow!
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