President Trump’s 2005 Tax Return – What It Tells Us
Yesterday, Tuesday March 14, 2017, while most of the New England area was buried in snow, MSNBC published President Trump’s 2005 income tax return – or at least the first two pages of it. What does the return tell us and what does it not?
The Basics – We know he had a positive income in the amount of $152,737,866 and $103,201,242 in tax write-offs. He paid a total of $38,435,451 in taxes for the year.
It remains to be seen the specific tax plan that Donald Trump will implement as President of the United States. The effects of Donald Trump’s tax plan will depend on taxpayers’ income and tax planning. Some think that Trump’s plan will significantly reduce income and corporate taxes, and eliminate the estate tax. It seems the plan’s largest effect on individual taxpayers will be to reduce the top tax bracket 6.6 percentage points from 39.6 percent to 33 percent.
The end of the year is the perfect time for taxpayers to make financial adjustments to lower their tax bill for the current year. Making adjustments to income may help reduce tax liability. Income is typically taxed in the year it is received, however, if you don’t have to pay tax today and may pay it tomorrow, why not? Deferring income is an excellent strategy to lower an annual tax bill. However, only taxpayers that expect their tax bracket to remain the same or decrease to a lower bracket should defer income.
Did you know you could be responsible for your parents’ unpaid bills? Ever heard of Filial Responsibility Laws? Well, these are laws obligating you to provide financial support for your indigent parents. Yes, obligated under law. According to the National Center for Policy Analysis, 21 states across the country (including states like Connecticut, New Jersey and Massachusetts) allow for a civil action to obtain financial support for indigent parents. At least 12 states may impose criminal penalties on children who refuse to support their parents. Though rarely enforced, these laws may be dusted off by states looking to save money on Medicaid bills.
Of course, none of us “prefer” to pay taxes. Once we do pay our taxes, if we expect a refund, we hardly exhibit any patience awaiting it in the mail. But the IRS is a mega-bureaucracy, which means that things get lost, overlooked, mishandled, and, well I shudder to think. Thus, delays are not altogether uncommon, and failures to process and mail returns actually occur, albeit infrequently. So what do you do if you haven’t received your tax refund?
Earlier this year, the Internal Revenue Service announced it is beginning protocols for processing tax returns using the Earned Income Tax Credit (EITC) and Additional Child Tax Credit (ACTC). The IRS is sharing this information to help taxpayers, tax preparers, and other tax professionals prepare for the opening weeks of the 2017 filing season. The IRS is attempting to ensure taxpayers receive a correct and accurate refund.
The Protecting Americans from Tax Hikes Act of 2015 (PATH Act) was enacted in December of 2015, which made several changes to the tax law affecting taxpayers with families. This change begins Jan. 1, 2017, and therefore may affect some returns filed early in 2017.
Many taxpayers overlook the long list of deductions that they may take when completing and filing their tax returns. The tax professionals at the Thorgood Law Firm can help ensure that all taxpayers take advantage of any and all deductions that may apply to them. Here is the fifth part of our multi-part blog on the most overlooked tax deductions:
LEGAL INCOME & FEES AS DEDUCTIONS
Jury pay paid to employer