Preparing for Tax Policy Changes in 2021

2020, a year we will never forget, is behind us, and we are already three weeks into 2021. As we approach the inauguration of a new president and hope and pray for the division in this country to abate, I want to remind everyone that we anticipate significant tax policy changes for 2021. The election and fiscal stimulus proposed and approved by Congress will have tremendous implications for clients, given the likelihood of tax policy changes.

President-elect Biden has announced an aggressive 100-day plan, which includes fighting for a repeal of the 2017 tax cuts and:

  • An increase in the corporate tax rate from 21% to 28% for business income and a 15% minimum tax rate on company earnings as well.
  • An increase to 21% for the corporate tax rate for foreign subsidiaries of U.S. firms.
  • An increase in the current tax rate for individual income from 37% to 39.6% at the $400,000 level.
  • Dividend and capital gains income to be taxed at the same rate as ordinary income rate for income above $1 million.

We will learn more details soon enough, but it's certain that the tax changes will greatly impact the wealthy. If you earn over the $400,000 threshold, now is the time to visit with your estate planner, financial advisor, life insurance agent, and CPA so that you receive the best advice and course of action to take to protect the wealth you have worked so hard to make and keep. Read more about our approach to tax planning and contact us to schedule an in-person or virtual appointment to discuss how you may be impacted by policy changes in 2021.

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