When Jeff Bezos was worth $18 billion, he reportedly claimed a $4,000 tax credit intended for families earning less than $100,000

Jeff Bezos
Billionaire Amazon CEO and cofounder Jeff Bezos.

In 2011, billionaire Amazon CEO Jeff Bezos reportedly paid nothing in federal income taxes. That same year, when his net worth was valued at around $18 billion, he filed for and received a $4,000 tax credit for his children, ProPublica reports.

The outlet obtained confidential tax documents filed with the Internal Revenue Service, which were revealed in a bombshell new report on some of the world’s wealthiest people. ProPublica did not publish its source data or disclose how the information was obtained.

In 2007, and again in 2011, he reportedly paid nothing in federal income taxes because the he lost more money investing than he earned from other income, according to the report. He made so little in 2011, according to the US government tax code, that he was able to file for and receive a $1,000-per-child tax credithouseholds with over $100,000 in joint income weren’t eligible to receive the credit.

As a result, despite being a billionaire many times over in 2011, Bezos was able to receive a $4,000 credit from the federal government. That’s because Bezos’ net worth is largely tied to stock, which does not affect an individual’s tax bracket until shares are sold and that revenue is reported as income.

Billionaires like Jeff Bezos, whose net worth is currently about $190 billion, according to Forbes, and Bill Gates derive little wealth from their annual income. Instead, much of their net worth is tied to stock holdings.

Bezos, for example, owns a 10.3% stake in Amazon that’s valued at about $170 billion.

The majority of Bezos’ net worth – $170 billion – is tied to Amazon stock, which fluctuates regularly and has even left the billionaire jockeying for the world’s wealthiest title with Tesla CEO Elon Musk at times. At least $19 billion of Bezos’ wealth is not tied to his stake in Amazon.

Bezos can skip paying taxes on his accumulated wealth from the Amazon stock because stock gains aren’t taxed until they are realized by selling off the stock.

He’s sold some of his shares in the past for massive gains: $5 billion earlier this year, $3.1 billion in August 2020, and just shy of $2 billion the prior August. He’s also said that he sells about $1 billion in shares annually to fund his space rocket company, Blue Origin. It’s unclear what taxes he paid on those sales.

For the years he did pay federal income taxes between 2006 and 2018, Bezos paid a total of about $1.4 billion on a reported income of $6.5 billion, or a rate of about 21.5%. That reported income does not include the vast increase to his net worth during the same period – about $127 billion, according to Forbes – due to his stake in Amazon.

Representatives for Bezos didn’t respond to a request for comment as of publishing.

Got a tip? Contact Insider senior correspondent Ben Gilbert via email (bgilbert@insider.com), or Twitter DM (@realbengilbert). We can keep sources anonymous. Use a non-work device to reach out. PR pitches by email only, please.

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Expansions of the Child Tax Credit and Earned Income Tax Credit were an important move, but they are only temporary and leave out too many Americans in need

Biden signs American Rescue Plan
US President Joe Biden signs the American Rescue Plan on March 11, 2021, in the Oval Office of the White House in Washington, DC.

  • Expansions of the EITC and CTC were implemented as part of the American Rescue Plan Act.
  • As of now, these expansions are temporary and only apply to the current tax year.
  • Many needy Americans were ineligible or weren’t aware of actions they need to take to claim these credits.
  • Bobbi Dempsey is a freelance writer, economic justice fellow at Community Change, and reporting fellow at Economic Hardship Reporting Project.
  • This is an opinion column. The thoughts expressed are those of the author.
  • See more stories on Insider’s business page.

The American Rescue Plan Act signed by President Biden in March included a range of major actions and initiatives designed to provide immediate, significant economic relief to the many Americans struggling through financial hardships related to the pandemic.

Chief among those is a pair of tax credits that has been greatly enhanced and expanded: the Child Tax Credit (CTC) and the Earned Income Tax Credit (EITC).

These tax credit expansions should provide much-needed but temporary relief to needy Americans – but there were some critical flaws in the implementation and execution that may leave some eligible recipients shortchanged or left out completely, while other disadvantaged US families weren’t eligible at all.

The basics of the tax credit expansions

The Child Tax Credit actions make the credit fully refundable – meaning, if the tax credit is more than a household’s tax liability, they will get the excess back as a refund – while also increasing the amount families receive and getting rid of the work requirement. Eligible families will start seeing the impact of the CTC changes quickly, as advance payments will start reaching these families in monthly increments beginning in July and running through the end of the year.

The expansion of the Earned Income Tax Credit will especially help childless Americans, generally meaning people who do not have any children who could be claimed as dependents, who are living below or near the poverty line.

The act raises the maximum EITC for childless adults from around $530 to roughly $1,500. It also expands the age range of childless workers eligible for the tax credit.

Those who benefit from these credits urgently need this support, which will offer a bit of relief to help them keep their heads above water financially. While my household doesn’t currently include any dependent children, it does contain several adults who will benefit from the expanded EITC.

Some major pitfalls

These tax credit expansions were a good first step, but in their current form, they fall woefully short. For one, the expansions are temporary. As of now, the actions are only effective for the 2021 tax year. There is reason to hope that may change, though. In late March, dozens of Democratic senators sent a letter to President Biden urging him to make the changes to the CTC and EITC permanent.

Another issue is that eligible people who fail to file a tax return will miss out. People need to file their taxes in order to receive these credits. This is true even for those who otherwise normally would not need to submit a tax return because they have no tax liability.

This requirement is most likely to trip up adults without dependent children and with little taxable income because they might not be required to file a tax return and may be unaware that by failing to file they lose out on this refundable credit.

By contrast, taxpayers with dependent children are more likely to already be in the habit of regularly filing an annual tax return – even if they have minimal taxable income – in order to take advantage of credits and other tax breaks they would get routinely, during pre-pandemic times. But those parents who didn’t file a 2019 or 2020 return won’t receive any of the money from this credit until after filing their 2021 return next year – meaning they won’t get the advance payments this summer.

I’m not sure the government and organizations that serve low-income populations have done a sufficient job of educating people about these credits, how the process works, and why it’s important for them to file a tax return even if they normally wouldn’t.

I suspect that some people may assume that the government will simply send them a check or find some other way to get this money to them, similar to the process for distributing stimulus payments. Unfortunately, that is not the case. Tax credits are tied to tax returns and are disbursed through a process that is triggered by the filing of a tax return. Those who don’t file a tax return will simply miss out.

Also, a large number of immigrant or “mixed status” families are ineligible. Under current federal law, all household members listed on the tax return must have a Social Security number in order for the family to be eligible for the EITC. An Individual Taxpayer Identification Number – an identifying number used solely for tax purposes that is assigned to people who cannot obtain a Social Security number, such as non-citizens and undocumented immigrants – is not sufficient. If even one person on the tax return lacks a Social Security number, all members of the tax household are ineligible. This will impact many mixed status families.

A good first step, but a long way to go

These temporary expansions will definitely make a difference for these eligible families who are able to complete the steps necessary to receive them. But this is a limited, short-lived solution for a long-term problem. I’m hoping that seeing the positive impact on those who benefit from these expansions will motivate lawmakers to correct the shortfalls and inadequacies – and then make those improved actions permanent.

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Biden calls on all US employers to pay full-time workers for time missed due to vaccines

Joe Biden
President Joe Biden.

  • Joe Biden on Wednesday called on all US employers to give their workers paid time off to get vaccinated.
  • The president also reaffirmed his commitment to a paid-leave tax credit to help small businesses offset the cost of the time off.
  • This comes ahead of Biden’s upcoming announcement that the US met his goal of 200 million shots in 100 days.
  • See more stories on Insider’s business page.

President Joe Biden will announce on Thursday that the US met his vaccination goal of 200 million shots in 100 days. And on Wednesday, he announced new plans to ensure every American employee can get a shot.

A White House statement said that Biden is calling for every employer in America to provide paid time off to get vaccinated, which would include the time it takes to recover from any of the vaccine’s side effects. He also reaffirmed his commitment to a tax credit that will offset the cost for small businesses with fewer than 500 employees to provide full pay for workers who want to get a vaccine.

“Providing paid time off for vaccinations is an investment in the safety, productivity and health of an employer’s own workforce and their community,” the statement said. “No working person in this country should lose a single dollar from their paycheck to take time to get the shot or recover from it.”

The paid-leave tax credit was included in Biden’s $1.9 trillion stimulus law, and it ensures that “no small businesses or non-profits will lose a single dollar by providing such paid leave to workers receiving a vaccination.”

According to the White House, the credit will offset the cost for small businesses for up to $511 per day of paid sick leave offered between April 1 and September 30, and it will apply to nearly half of all private sectors in the country.

And along with the tax credit, Biden’s wants employers to help employees get vaccinated by making “commitments to provide accurate and timely information and incentivize all Americans to get vaccinated.” Those could include discounts for vaccinated people, product giveaways, or promotions.

Biden pledged in a March press conference that 200 million shots will be administered by the end of April, and on Monday, every American aged 16 and older became eligible for a vaccine.

“We have enough of it, you need to be protected, and you in turn need to protect your neighbors and your family,” Biden said in a video on Monday. “So please, get the vaccine.”

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Biden to throw support behind temporary extension of expanded child tax credit – meaning lower tax bills or higher refunds for qualifying parents

Biden
President Joe Biden has framed his infrastructure plan as a means of strengthening democracy and undermining autocracy.

President Joe Biden told lawmakers that he will put forward a plan to temporarily extend the expanded child tax credit, but he stopped short of proposing to permanently install it, according to The Wall Street Journal.

An expanded child tax credit was included in the $1.9 trillion COVID-19 relief package signed in March and was made scalable across income thresholds. One study said it could nearly halve child poverty, as Insider previously reported.

As Tanza Loudenback from Insider’s personal finance team wrote in an explainer on the child tax credit changes from 2020 to 2021. (Read it; it answers all of your questions):

“For 2021, the child tax credit increases to $3,600 per child under age 6 and $3,000 per child aged 6 to 17 (the 2020 credit edges out 17 year olds). It’s also fully refundable – half of the credit can be sent to qualifying taxpayers in the form of direct cash payments from July to December 2021. The other half will be available when they file their tax return in 2022.”

Insider estimated that up to 30 million American families could qualify for the child tax credit.

The IRS said that monthly child tax credit payments could begin by July 1.

According to the report, Biden met with the Congressional Hispanic Caucus on Tuesday and said that he is resistant to pushing for a permanent implementation of the tax credit due to potential pushback in the Senate.

During the meeting, Biden reportedly said he was open to extending the current tax credit, set to expire at the end of 2021, for several years.

In the heels of his proposed infrastructure and jobs bill, the Biden administration is working out the details for a possible $1 trillion plan focused on parental leave and child care, The Washington Post reported. The American Families Plan could include a provision to extend the expanded child tax credit to 2025, sources told The Post.

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WATCH: How small businesses can master their taxes in 2021

Filing taxes might be a bit different for small business owners this year. Many were greatly impacted by months of mandatory closures, lost essential revenue, civil unrest, government loans and grants, and layoffs. 

To find out what all these things mean for your taxes, small business reporter Jennifer Ortakales Dawkins talked with tax expert panelists. They covered how the pandemic, PPP loans, and revenue losses could impact your filings. 

Meet our panelists: 

Robbin Caruso is a partner in the tax department and the co-leader of the National Tax Controversy group of Prager Metis.

Nicole Davis is the founder and principal of Butler-Davis, a tax and accounting firm located outside of Atlanta, GA. 

Rick Lazio is the senior vice president of alliantgroup and a former US representative.

Topics covered: 

At 1:57 we go over basics like who is considered a small business and what the tax filing deadlines are depending on your business license. 

At 14:16 panelists explain what business owners should know about PPP loans and other types of federal aid and how those can affect your taxes. 

At 23:09 we cover how government-mandated closures affect business taxes,  what to do if your business deferred payroll taxes in 2020, and what pandemic-related expenses businesses can claim. 

At 33:00 panelists explain new, existing, and updated tax credits and incentives, including the Employee Retention Credit (ERC) and Research and Development (R&D) credits. 

And at 46:33 we go into a Q&A to respond to viewers’ questions as well as hear a few more tips from our panelists. 

Watch the full webinar above. For more information on filing your taxes as a small business, check out additional coverage below. 

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TAXES: Everything small business owners need to know in 2021

Black business owner entrepreneur
  • 2021 will be an important year for small businesses to file their taxes.
  • Tax credits and incentives can be an effective way to offset losses from a difficult year.
  • But very few small businesses take advantage of all the credits available to them.
  • Visit the Business section of Insider for more stories.

2021 will be an important year for small businesses to file their taxes, as many are still reeling from financial losses during the pandemic. But tax credits and deductions can be used to offset some of your costs.

Join us March 2 at 1 PM EST for a webinar on how small businesses can master their taxes. Our panel of tax experts will answer your questions, which you can submit here. Register for the live event here

Getting tax credits and incentives

Business tax credits and incentives can be an effective way to save money or offset losses from a difficult year, but many small businesses don’t take advantage of them because they’re unaware of what’s available to them. The first step to getting them will be finding what your company qualifies for. Then, you’ll need to regularly monitor compliance. 

Some examples of tax credits would be if you provide childcare services for your employees or employ disadvantaged groups, such as the formerly incarcerated, long-term unemployment recipients, veterans, and summer youth.

Read more: This tax season, businesses can get credits for creating jobs, providing employee benefits, and using green energy

6 important tax credits for PPP borrowers

Small businesses can take advantage of both federal aid under the CARES Act and certain tax deductions, including the employee retention tax credit and research and development credits. In addition, the energy-efficient building tax deduction and excise alcohol tax break were made permanent.  

The business meals tax credit, commonly known as the “three-martini lunch,” has been temporarily increased from 50% to a full 100% deduction.

Read more: PPP borrowers can now claim 6 important tax credits – a major change from the original rule 

More about the employee retention credit

The Employee Retention Credit provides up to $14,000 per employee for eligible businesses in 2021. Businesses are eligible to claim this tax credit if they experienced full or partial shutdowns due to government orders during the pandemic or can show a 20% drop in quarterly revenue compared with the same quarter in 2019.

Read more: A business tax credit for keeping employees may be more helpful than a PPP loan – and you could be eligible for both

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