Taking to social media X (which he owns), the billionaire mockingly said that “I paid so much in taxes one year that it broke the IRS computer (actually). Too many digits. They had to update the software to get it processed.”
Musk’s fortune, built largely on soaring equity stakes rather than salary, complicates the answer. His wealth—now estimated well above $600 billion—does not translate into steady annual income. Most of it exists on paper, tied to shares in companies he founded or leads.
Between 2014 and 2018, Musk paid about $455 million in taxes on roughly $1.52 billion in reported income. Yet, according to ProPublica, he paid no federal income tax in 2018—a result of losses, deductions, and the way U.S. tax law treats unrealised gains.
His largest tax bill came later. In 2021, Musk said he expected to owe around $12 billion after selling roughly $14 billion worth of Tesla stock. That sale was triggered by the exercise of stock options, which converted paper wealth into taxable income.
Musk often describes himself as “cash poor,” arguing that his wealth is locked into companies advancing long-term goals rather than personal luxury. In 2020, he even pledged to sell most of his physical possessions. He has also defended his vast fortune by framing it as capital for humanity’s expansion into space.
That argument gained new attention after a major legal turning point. A ruling by the Delaware Supreme Court reinstated Musk’s 2018 Tesla compensation package, reversing a lower court decision that had voided it. The restored stock options—now worth far more than when first approved—pushed Musk’s net worth close to $750 billion, cementing his position as the world’s richest individual.
Investor confidence has only added fuel. Reports that SpaceX could eventually go public sent valuations higher, while Tesla shareholders later approved an even more ambitious pay plan reportedly valued at up to $1 trillion, the largest ever proposed for a corporate executive.
Beyond Tesla and SpaceX, Musk controls a sprawling portfolio that includes Neuralink, The Boring Company, X Corp. (formerly Twitter), and xAI. Together, these ventures explain both his unprecedented wealth—and why his tax payments fluctuate wildly from year to year.
In short, Musk’s quip about “breaking” the IRS reflects a reality of modern billionaire finances: enormous tax bills can appear suddenly, but only when paper wealth turns into real income.