President Obama and the First Lady managed to do something that many taxpayers haven’t yet done: they have filed their federal income tax returns for the 2011 tax year (downloads as a pdf).
Like most married couples, President Obama and the First Lady file as married filing jointly. They also itemized their deductions, something that about one-third of all taxpayers will do in 2011.
In total, the Obamas reported adjusted gross income (AGI) of $789,674. About half of that was the President’s salary; the other half is from sales proceeds of the President’s books. The Obamas reported just over $10,000 in interest and a remarkable $3 in taxable dividends. Nope, not a typo, just $3, which means that I will report more in taxable dividends this year than the President.
Like many taxpayers, the Obamas had another tough year with investments. Together with losses from prior years, they reported a capital loss of $119,151 for 2011. However, under the law, that amount was capped for tax purposes as $3,000.
The Obamas claimed $278,498 in itemized deductions. Of that, they reported $172,130 (or about 20% of their AGI) to a number of charities. The largest single gift was a $117,130 contribution to the Fisher House Foundation. The Fisher House Foundation serves as a kind of a Ronald McDonald House for military families, providing a home away from home for families while veterans are hospitalized.
Not surprisingly, since they are high-income taxpayers, the Obamas were subject to the alternate minimum tax (AMT) for 2011 of about $12,000.
The First Family paid $162,074 in total federal income tax, giving them an effective federal income tax rate of 20.5%. With withholding and estimated payments of $186,589, this resulted in an overpayment. The Obamas were entitled to a refund totaling $24,515 but instead chose to apply that towards next year’s tax return.
The President and First Lady also released their Illinois income tax return and reported paying $31,941 in state income tax.
Also due by April 17, 2012: federal gift tax returns. The President and First Lady filed federal gift tax returns showing that they split gifts. The First Family opted to contribute more than the annual exclusion amount to 529 plans in 2007 and spread that amount out over five years for federal gift tax purposes.
The Vice President and Dr. Jill Biden also released their 2011 federal income tax returns (downloads as a pdf), as well as state income tax returns for Delaware and Virginia.
Like the Obamas, the Bidens filed as married filing jointly. They, too, itemized.
Most of the Bidens’ income came from salary with additional monies from Social Security and pension. I will also report more in taxable dividends this year than the Vice President: he and his wife reported none.
The Vice President and Dr. Biden reported adjusted gross income of $379,035. Of that, they reported $5,540 (or about 1.5% of their AGI) to a number of charities. The largest single gift was $1,080 made to Northern VA Community College Alumni Scholarship Fund.
The Bidens, like the Obamas, were subject to the AMT for 2011.
The Bidens paid $87,900 in total federal tax for 2011, giving them an effective federal income tax rate of 23.2%. They paid $13,843 in Delaware income tax and $3,614 in Virginia income tax.
Most tax professionals would say that the Bidens planned a little better than the Obamas since the Bidens owed a small amount ($237) in federal income tax. Ideally, you want to get as close to zero as possible, not owing thousands and not being owed thousands (why let the government use your money for free all year?).
It’s worth noting that neither the Obamas nor the Bidens would have been affected by the so-called “Buffett Rule” that President Obama has proposed: that rule would impose a surcharge on those taxpayers reporting more than $1 million in income. However, both the Obamas and Bidens would have seen their tax bills go up had the Bush tax cuts been allowed to expire.
