Biden-Harris Tax Returns: To S-Corp or Not to S-Corp


Last month, Joe Biden released both his and Kamala Harris' tax returns on his website.


On his return, Biden reported passthrough income from an S-Corporation called CelticCapri. He created CelticCapri for his writing and speaking engagements after his Vice President term ended in 2016. In 2019, he took a reasonable $112,500 salary from the S-Corporation and reported the remaining income as profit. Having made millions from this S-Corporation in years prior, forming this entity immensely reduced his self-employment tax over time. Smart move.


I was surprised, however, to come across a Schedule C on Harris' return (Schedule C is for sole proprietorships and LLCs, not S Corps) for her writing business. With a net profit of almost $265,000, I would have expected her writing business to be taxed as an S-Corporation to minimize self-employment tax. However, there might be a few reasons as to why she preferred not to make the S election:

  • Her wages from the Senate exceeded the maximum amount of earnings subject to Social Security Tax. So, her business income was only subject to the Medicare portion (2.9% plus the Additional Medicare Tax) instead of the full 15.3% self-employment tax.

  • Although minimal, she avoids the $800 California franchise tax (assuming her business is a sole proprietorship and not an LLC).

  • 2019 was the first time she released a book in ten years. She might have postponed the S election until she starts writing enough to pay herself a reasonable salary annually.


Making the S election requires the consideration of multiple factors, not just tax savings. As an attorney who is married to an attorney, I am going to take the position that Kamala considered all factors and the S election for her writing business was not the beneficial decision in the overall scheme of things.




This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisers before engaging in any transaction.

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