Bidens' Taxable Income Came to $607,336 in 2020, Returns Show -- 2nd Update
By Richard Rubin
WASHINGTON -- President Biden and his wife, Jill Biden, made
$607,336 in adjusted gross income in 2020 as he ran for office,
according to tax returns the couple released Monday.
On the day that Americans must pay their 2020 taxes or seek an
extension -- delayed from the usual April 15 due to the coronavirus
pandemic -- the couple resumed the voluntary disclosure tradition
that President Donald Trump broke during his term. The Bidens'
returns showed declining income from 2019 and much smaller use of a
tax strategy that the Biden administration wants to eliminate.
The Bidens' 2020 income came primarily from pensions, Social
Security benefits and Dr. Biden's speaking and writing engagements.
The couple donated $30,704 to charity and paid $157,414 in federal
income and self-employment taxes, or 25.9% of their adjusted gross
income. They would pay more under Mr. Biden's tax proposals, which
would raise the top individual tax rate to 39.6% from 37%.
After Mr. Biden left the vice presidency in 2017, the couple
routed their speech and writing income through S corporations. That
move meant that the couple avoided Medicare taxes totaling 3.8% on
much of their income, saving them as much as $500,000 in 2017 and
Legally, S corporations are supposed to pay only reasonable
compensation to their owners equivalent to the market rate for such
services. That compensation would face payroll taxes, and any
remaining profits would be considered active business income
outside the payroll tax or an equivalent 3.8% tax on investment
That rule is designed to prevent people from turning labor
income taxed at higher rates into business profits taxed at lower
rates, and the IRS often gets in disputes with taxpayers about what
reasonable compensation would be. A gap between reasonable
compensation and business profits is harder to justify when the
business is driven largely by the S corporation owner's work.
In 2017 and 2018, the Bidens' S corporations reported more than
$13 million in profits and paid the couple less than $800,000 in
salary. In 2019, they generated about $229,000 in profits and paid
the couple about $309,000. In 2020 that flipped, and they reported
less than $100,000 in profits while paying Dr. Biden $200,000 in
During the 2020 campaign, Mr. Biden proposed a series of tax
increases on high-income households, but he didn't call for
expanding existing 3.8% taxes on top earners' investment, wage and
self-employment income to active profits of S corporations. It was
one of the few Obama administration tax-increase proposals Mr.
Biden didn't adopt or expand.
Last month, however, his administration said such income above
$400,000 would face a 3.8% tax, noting that for the existing tax,
"the application is inconsistent across taxpayers due to holes in
The Bidens paid significantly more for household help in 2020,
spending more than $95,000, up from $57,000.
The Bidens' disclosure marks a return to how presidents handled
their tax returns for four decades before Mr. Trump took
During the 2016 campaign and during his presidency, Mr. Trump
repeatedly said he would release his tax returns but ultimately
refused to do so. His administration fought a request from House
Ways and Means Committee Chairman Richard Neal (D., Mass.), who
sought the returns under a piece of the tax code that says the
Treasury Department "shall furnish" anyone's returns to the
That dispute landed in federal court -- and remains there. The
Biden administration hasn't reversed the Trump administration's
legal conclusion that such a handover wasn't required. The
administration and the Ways and Means Committee recently told a
federal judge that they have been discussing the issue.
Mr. Trump sometimes said he would release his returns after
audits were complete. The IRS automatically audits presidents and
vice presidents. Mr. Biden released his returns before that audit,
and an audit wouldn't affect future releases, said White House
press secretary Jen Psaki.
"We will continue to release the president's tax returns, as
should be expected by every president of the United States," she
Vice President Kamala Harris and her husband, Douglas Emhoff,
also released their 2020 tax returns. They reported $1.7 million in
adjusted gross income, mostly from his work as a lawyer.
Chad Day contributed to this article.
Write to Richard Rubin at email@example.com
(END) Dow Jones Newswires
May 17, 2021 18:20 ET (22:20 GMT)
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