Obamas' income declined in 2014 but they overpaid their taxes and get a refund

President Barack Obama and his wife, Michelle, reported adjusted gross income of $477,383 for 2014, down 0.8% from last year, according to tax returns released Friday by the White House. The Obamas paid $93,362 in federal taxes for an effective income tax rate of 19.6%. They made most of their income from the president's salary, plus about $16,000 in interest and $88,000 in book royalties. In his sixth year in office, Mr. Obama's earnings continued to decline and the couple reported their lowest income since 2004, before he was elected to the U.S. Senate. (More: The cruelest month: IRS doesn't mess around in April) “Every year, it looks exactly the same and I think that's certainly done by design,” said Anthony Nitti, a partner at the accounting firm of WithumSmith & Brown in Aspen, Col. “There's just no stock market investments whatsoever, same charitable contributions every year.” Mr. Obama's tax bill includes the cost of some of his own policies, including higher tax rates on wages and investment income for top earners. He also checked a box on the tax return that wouldn't exist without his Affordable Care Act, verifying that he had health insurance for 2014. Barack Obama, 53, and Michelle Obama, 51, paid $39,566 in mortgage interest. They have chosen not to refinance or pay off the mortgage on their home in Chicago, even though they could probably save money that way. TREASURY BONDS Because the Obamas are invested in Treasury bonds, they would do much better by paying off the mortgage instead of getting the limited tax breaks available at their income level, said Steven Bankler, an accountant in San Antonio, Texas. “Even if you're not in more lucrative investments, why are you paying the spread?” he said. (More: How financial advisers would reform the tax code) The Obamas overpaid their federal taxes throughout 2014. They will get a $20,641 refund and direct another $5,000 to their 2015 taxes. The Obamas donated $70,712 to charity, almost 15% of their adjusted gross income, according to the statement. Their largest donation, $22,012, went to the Fisher House Foundation, a Rockville, Md.-based organization that provides housing to families of military members and veterans receiving medical treatment. They also donated to the American Red Cross, Mosaic Youth Theatre of Detroit and Sidwell Friends School in Washington, which their daughters attend. The White House also released a state return showing that the Obama family paid $22,640 in Illinois taxes. Vice President Joseph Biden and his wife, Jill, reported $388,844 in adjusted gross income and $90,506 in federal taxes for a rate of 23.3%.