Monday, September 24, 2012


I hear that Mitt has finally filed, and released, his extended 2011 Form 1040.  I trust everyone is happy now.

So what insights did this return provide?

He made a lot of money from his investments.  His gross income for 2011 was $13.7 Million.  Hey, I should be so lucky!  (If I was I certainly would not be running for office, and the only 1040 I would ever do again would be my own).  He paid $1,935,708 in total federal taxes, which included $23,179 in self employment tax.  His effective tax rate is about 13.9%.  He was a victim of the dreaded AMT to the tune of $675,500+.

It appears Mitt and Ann gave about $4+ Million to charity in 2011, but only deducted $2,250,772.  $4 Million – God bless him!  That is almost 29% of his gross income.  In my 40 years of preparing 1040s I have come across only a handful of clients who have donated such a high percentage of income to charity – and it is not even a full hand!  I might not have supported the same charities as Mitt and Ann, but they did give the money, and property, to legitimate charitable organizations.

Why did they deduct only $2.25 Million if he really gave over $4 Million.  There is really no good reason.  He is legally entitled to claim a tax deduction for the full $4 Million – if I gave $4 Million to church and charity I would have deducted every penny.

The reason he did not claim all of his legitimate charitable deductions is because if he did a lot of vocal idiots would have been up in arms because his effective tax rate was so low.

Hey, if it is ok for the 47% to take advantage of the Tax Code to either pay no federal income tax or make a profit by filing a 1040, and it is, why is it not equally ok for Mitt and Ann to take advantage of the Tax Code to legally pay the least amount of tax possible?

And remember, the Romneys paid over $1.9 Million in federal taxes.  I expect that is more than the combined tax liability of all the residents of my new home town!  Mitt’s $1.9 Million funded an awful lot of government waste – and paid for some worthwhile and effective government programs as well.

So Romney’s 2011 return has been filed and released.  Big whoop!  Let’s move on to more important issues.


1 comment:

Peter Reilly CPA said...

Did you read the letter from PWC about the last 20 years of returns ?