The Ordinary Taxpayer’s Guide To The Extraordinary Story Of Trump’s Tax Returns

I haven’t seen President Trump’s tax returns. I’m going to start there. No matter how many times I’ve been asked today to offer my “take” on the returns, I can’t give a more honest answer than, “I haven’t seen the returns.”

I have, however, read the very detailed article from the New York Times NYT +0.2%, which can be found here. I’m not inclined to summarize it for you - you can read it on your own - and I’m not going to do an op-ed on the piece. If you are a regular reader, you’ll know that it’s not my style to play guessing games. But as I continued to be asked about the piece this evening, what did occur to me is that there are a number of issues raised in the piece that can be confusing for ordinary taxpayers like you and me.

So here are some answers to common questions raised by some of the headlines that are sure to come your way this week. I’ll update my answers as the story progresses.

I thought you once said you couldn’t find out anything from a tax return?
That’s what President Trump said in 2016, claiming, "You don’t learn anything from a tax return."

But that’s not what I said. I wrote just the opposite in 2016, noting that “a tax return is not just a bunch of numbers. It's a snapshot of your financial life.” Not only do you have a better understanding of where taxable income comes from, but you can also see potential failures in losses and worrisome positions with investments and loans. When it comes to taxpayers who itemize, you can learn about charitable deductions (not simply how much but where it's distributed), real estate taxes, real estate holdings, and more. You can also glean information about the existence of offshore accounts, household employees, rental properties and more.

I have, however, tweeted that "Tax returns (even officially filed ones) aren't dispositive when it comes to wealth.” I stand by that. One of the flaws of reviewing tax returns on their own is that they are not a reliable measure of a person’s net worth.