With the seat of President scheduled to change from Trump to Biden, we wanted to take a look at some tax law changes Biden is proposing. This article by Morningstar provided some insight into several of these proposals from the future Biden administration. We summarize them here, but for more in depth reading give the article a view:
- Change in the top individual tax rate from 37% up to 39.6%
- 39.6% capital gains tax on incomes over $1 million
- Reduction of itemized deductions: $3 for each $1 of income in excess of $400,000
- Elimination of the Qualified Business Income Deduction when income exceeds $400,000
- Increase in child and dependent tax credits, new credit for elder care
- New credit proposal for new homebuyers up to $15,000 in credit
- Renters credit to bring rent down where max. is 30% of income
- Retirement contributions would receive a credit rather than a reduction of income
- Reduction of the estate and lifetime gift exemption to as low as $3.5 - $6 million
- Increase of the corporate tax rate up from 21% to 28%
Be sure to consult your tax professional if you believe these changes would effect how you plan your finances in 2021.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties