Jeff Bezos Once Claimed Child Tax Credit Even Though His Net Worth Was $18 Billion

Mandatory Credit: Photo by AHMET SEL/SIPA/Shutterstock (10436139i)Amazon CEO, Jeff Bezos attends a commemoration ceremony held in front of Saudi consulate on the first anniversary of Saudi journalist Jamal Khashoggi's murder in IstanbulAnniversary of the assassination of Saudi dissident journalist Jamal Khashoggi, Istanbul, Turkey - 02 Oct 2019.
AHMET SEL/SIPA/Shutterstock / AHMET SEL/SIPA/Shutterstock

When Jeff Bezos was worth $18 billion in 2011, he owed nothing in federal income taxes. That same year he also received a $4,000 child tax credit, according to Business Insider, per ProPublica.

See: The First Jobs of Billionaires Like Warren Buffett and Jeff Bezos
Find: What Jeff Bezos Will Be Doing After Amazon and More Side Projects of Billionaires

ProPublica, a nonprofit newsroom focused on investigative journalism and public interest, recently obtained and shared the confidential tax records of Bezos and other wealthy individuals including Warren Buffett, Bill Gates, Rupert Murdoch, Elon Musk and Mark Zuckerberg.

The data that was shared shows that Bezos paid nothing in federal income taxes in 2007 and again in 2011 because he lost more money in investments during those years than he earned. His income was so low that he was able to receive a tax credit of up to $1,000 per child for each of his four children. Insider pointed out that to claim the credit households cannot earn over $100,000 per year.

Make Your Money Work

So how did Bezos get the credit? Investment losses can help reduce taxes by offsetting income or gains. Specifically, Bezos’ wealth is tied to stock which doesn’t affect your tax bracket until shares are sold. Sold shares count towards taxable income for that year.

See: Companies Like Amazon Might Finally Be Forced to Pony Up Taxes — What This Could Mean For You
Find: Jeff Bezos Supports Corporate Tax Hikes in Biden’s $2 Trillion American Jobs Plan

Furthermore, between 2006 and 2018, while Bezos’ overall wealth increased by $127 billion, his reported income was $6.5 billion so he only paid $1.4 billion in federal income taxes, according to Forbes, as reported by Insider. This equates to a 1.1% tax rate on his wealth increase, per ProPublica.

In contrast, the average American household actually pays more in taxes than it has in accumulated in wealth. According to ProPublica, a person making $65,000 will pay a year’s salary in taxes every five years.

More From GOBankingRates

About the Author

Josephine Nesbit is a freelance writer specializing in real estate and personal finance. She grew up in New England but is now based out of Ohio where she attended The Ohio State University and lives with her two toddlers and fiancé. Her work has appeared in print and online publications such as Fox Business and Scotsman Guide.

Best Bank Accounts of June 2022

Untitled design (1)
Close popup The GBR Closer icon

Sending you timely financial stories that you can bank on.

Sign up for our daily newsletter for the latest financial news and trending topics.

Please enter an email.
Please enter a valid email address.
There was an unknown error. Please try again later.

For our full Privacy Policy, click here.