Did you get some financial relief from the $1,200 stimulus checks provided by the CARES Act?
Probably not as much the millionaires & billionaires who will save a lot more than that on their taxes as a result of that law. (THREAD)
Probably not as much the millionaires & billionaires who will save a lot more than that on their taxes as a result of that law. (THREAD)
We highlighted several CARES Act provisions that provide sometimes substantial tax savings that will benefit the wealthiest Americans.
ELIMINATING REQUIRED DISTRIBUTIONS FROM RETIREMENT ACCOUNTS
If you're 72 or older and have a retirement account or inherited one (at any age), you must withdraw a minimum amount each year. CARES put a pause on that.
If you're 72 or older and have a retirement account or inherited one (at any age), you must withdraw a minimum amount each year. CARES put a pause on that.
For older and wealthier folks who have no need to take money from their IRAs and 401(k)s, this can mean significantly less income tax while the retirement account continues growing
CHARITABLE DEDUCTIONS
Taxpayers who itemize can now deduct up to 100% of their adjusted gross income for charitable contributions, up from 60% last year.
Taxpayers who itemize can now deduct up to 100% of their adjusted gross income for charitable contributions, up from 60% last year.
While many people earning less than $100K/year give large portions of their income to charity, a small number of the most wealthy get the most value from this deduction.
SAVINGS FOR PASS-THROUGH ENTITIES
This provision allows the ultra-wealthy to use paper losses to offset income that was taxed in previous years, when tax rates were higher, and get refunds based on those old, higher rates.
This provision allows the ultra-wealthy to use paper losses to offset income that was taxed in previous years, when tax rates were higher, and get refunds based on those old, higher rates.
Pass-through entities include partnerships, hedge funds and a lot of real estate businesses...such as those owned by Donald Trump and the family of Jared Kushner.
Congress’ Joint Committee on Taxation estimates that about 82% of these benefits (approx. $115 billion) will go to about 43,000 taxpayers with $1 million or more in annual income; an average of about $2.68 million each.
These 3 provisions alone will cost American taxpayers an estimated $157.16 billion in uncollected revenue. Additional changes that will benefit corporations will add approximately $100.79 billion to that.
In total, America's least in-need will see about $257.95 billion in benefits, which is nearly as much as the estimated $292.37 billion price tag for the stimulus grants paid out to regular folks.
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