A lot of well-to-do people paid more taxes this filing season, thanks to the new taxes on wealthier individuals that took effect in 2013.
The president and vice president were part of that group.
The 2013 tax returns of both of the United States’ top elected leaders, which they filed jointly with their wives, were released April 11.
The filings show that the Obamas and Bidens, like most taxpayers, get the bulk of their income from wages. The returns also show that President Barack and Michelle Obama’s and Vice President Joe and Jill Biden’s combined incomes were enough to trigger a couple new taxes that were enacted last year to help pay for health care reform. They were also subject to some tax break limitations passed as part of the so-called “fiscal cliff” tax bill.
White House wealth and taxes
The Obamas reported $481,098 in adjusted gross income and tax of $98,169. That puts the first couple’s effective federal tax rate at 20.4 percent.
Their total tax bill included $2,310 from new Obamacare taxes. The president and his wife had to pay $2,174 more, thanks to the 0.9 percent added Medicare withholding tax, and $136 as part of the net investment income tax, or NIIT.
The Obamas also were prevented from lowering their tax bill more because, in addition to taxes related to health care, they faced other new tax laws that applied because of their income level.
They lost all of their $15,600 in exemptions. If the POTUS and FLOTUS had made less money, they could have claimed $3,900 each as well as the same amount for each of their two dependent daughters. And their itemized deductions were reduced from $153,202 to $147,769. Both of these tax-break limits were part of the American Taxpayer Relief Act of 2012 enacted in January 2013.
The Bidens faced similar new taxes and tax-break restrictions.
The veep and his wife paid $96,378 in tax on $407,009 in adjusted gross income. The Biden’s effective tax rate was almost 24 percent.
Their tax bill included $1,497 in the two new health care taxes. The Bidens were able to claim only $1,092 in personal exemptions instead of the $7,800 they could have claimed if they had made less money. Their Schedule A deductions also were cut from $70,794 to $67,584.
Both couples also took alternative minimum tax hits. The Obamas had to pay $9,513 more because of the parallel tax, while the Biden’s AMT bill was an added $2,815.
State taxes, too
Both couples also filed state tax returns.
The Obamas paid $23,328 in state income tax to Illinois.
The Bidens’ total state tax bill came to $18,114. Most of their state obligation — $14,644 — went to Delaware. Dr. Biden, who received her doctoral degree from the University of Delaware and teaches at Northern Virginia Community College, paid $3,470 in Virginia income tax.
If you are done with your Form 1040, how does it compare with the returns filed by the Obamas and Bidens?
More tax info from Bankrate
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Veteran contributing editor Kay Bell is the author of the book “The Truth About Paying Fewer Taxes” and co-author of the e-book “Future Millionaires’ Guidebook.”