Elon Musk would pay more taxes than any American this year: more than $ 8 billion

On tuesday night, Elon Musk made a bold claim on Twitter: the billionaire would pay more taxes than any American in history in this 2021.

Musk could be right to be the richest person in the world, because you probably owe the United States federal government at least $ 8.3 billion in 2021, according to estimates from Forbes, based on its stock sales of nearly $ 13 billion through Dec. 13.

Amazon founder Jeff Bezos came close to this last year, selling $ 10.2 billion worth of stock in his company. Action that would cause the tax bill to have been up to $ 2.4 billion.

However, only the Internal Revenue Service knows who is the largest taxpayer in American history.

In previous years, Musk has paid little or no tax. According In a ProPublica investigation published in June, Musk paid a total of $ 455 million in federal taxes between 2014 and 2018While his wealth grew by about $ 13.8 billion, showing that the billionaire did not pay federal income taxes in 2018 (he also did not sell Tesla shares that year).

Elon Musk may have other sources of income that increase his 2021 account, or that You’re using business losses from other parts of your property – a common tactic among billionaires to lower your bill. This year he also sold a half dozen mansions in California, a move that likely produced taxable income.

Similarly, in October he dodged a bullet when Senator Ron Wyden presented a short-lived plan. that would have taxed the unrealized capital gains of America’s richest people, which Forbes He estimates it could have cost Musk $ 29.8 billion.

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However, days later the plan was replaced by a less drastic measure. Because Musk does not currently receive an annual salary from Tesla, and the company does not pay dividends, the billionaire probably wouldn’t have owed “Uncle Sam” any taxesIt also began to divest Tesla shares at an unprecedented rate during November.

Your tax bill could be even higher if California is after you. Although Musk moved to Texas last year, his former home state could tax the value of the options he won. while residing there.

Between state and federal taxes, Musk could end up with a 50% blanket tax rate. (While some types of options can be exercised without incurring immediate tax, and the proceeds from the sale of shares are taxed at lower capital gains rates., Musk’s stock options are not “qualified,” meaning they will likely face the much higher ordinary income tax rate imposed on compensation, according to Bruce Brumberg, tax attorney and contributor to Forbes).

Elon Musk Could Lower Your Tax Bill This Year if you donate Tesla stock, or cash to your Musk Foundation charity or directly to one or more non-profit organizations.

According to documents filed with the Securities and Exchange Commission (SEC), Musk hasn’t donated Tesla stock so far in 2021; the last time he did it was in December 2019, when he allocated 11,000 shares of Tesla to his foundation, the equivalent of 4.1 million dollars.

Your tax future is not over yet: another $ 7 billion in federal taxes can wait for Musk if you keep your recent promise to sell 10% of your Tesla stock. (So ​​far, he has sold about 3.2% of his stake.)

For this you would have to pay the IRS approximately $ 2.65 billion in additional capital gains taxes based on Tesla’s share price on Dec. 15, plus another $ 4.4 billion if you exercise the rest of your shares.

Stock options will expire in August 2022, if Tesla’s stock price remains as is. That is not a fact; The shares are down nearly 22% from their peak of $ 1,222 on Nov. 1, 2021.

Musk’s Tuesday tweet was part of an attack on Senator Elizabeth Warren, his latest dispute on social media against progressive politicians.

After Senator Warren tweeted asking a change in the “rigged tax code” to force Musk to “pay taxes and stop taking advantage of everyone else”The billionaire was not silent and brazenly replied, “Please don’t call your manager, Senator Karen.”

On Monday, the magazine Time named Elon Musk as its “Person of the Year,” prompting Senator Warren to tweet about his tax obligations.

Musk did not immediately respond to a request for Forbes to comment on your tax bill.

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Elon Musk would pay more taxes than any American this year: more than $ 8 billion