What Will Mitt Romney???s Tax Returns Reveal? (ContributorNetwork)

CNN reports GOP presidential candidate Mitt Romney will release his 2010 income tax returns on Jan. 24. It will be a first for the candidate as the interest in his finances is high. Romney's vast wealth has come under scrutiny as he made hundreds of millions of dollars at Bain Capital, a company he chaired for over a decade.

Raw Figures

Romney's net worth is estimated as high as $264 million. That income comes from investments, speaking engagements and proceeds from his book entitled "No Apology: The Case for American Greatness." The Associated Press reports Romney said his effective tax rate was around 15 percent. Americans in the top income bracket pay a 35 percent tax rate on income that isn't made from investments.

Romney's income is taxed different if he makes it from investments or is self-employed. Romney wasn't employed at a company in 2010 as his ties with Bain Capital ended in 1999 when he ran for public office. Investments in stocks and savings accounts are taxed at a much lower rate than that of income as an employee paid by a company.

How much of Romney's income tax return released for public inspection will also be interesting. His itemized deductions for charitable donations and interest on mortgages (if any) will reveal how much of a philanthropist Romney is, in addition to how much his homes are worth.

Reasons for Release

Romney's reasons for the revelation to voters are two-fold. First is that he lost the South Carolina primary to Newt Gingrich. Romney's failure to release his tax return was termed a "mistake" by the candidate. The former governor of Massachusetts claimed his income tax return was a "distraction" in South Carolina and may have cost him the race.

Foreign Investments

One thing the income tax returns may or may not reveal is how much money Romney has tied up in the Cayman Islands. The Atlantic Wire reported three days before South Carolina's primary that Romney has at least $8 million in funds based in the Cayman Islands. That small Caribbean nation doesn't pay American income taxes on investments. Although it's not illegal, funds set up in the Caymans are generally used to avoid paying American income taxes.

Source: http://us.rd.yahoo.com/dailynews/rss/personalfinance/*http%3A//news.yahoo.com/s/ac/20120123/pl_ac/10874447_what_will_mitt_romneys_tax_returns_reveal

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