Tax Changes Are Coming
Joe Biden has made his desires known that he wants to raise income taxes. There is also the possibility that other taxes will be increasing as well to pay for all the new programs he has proposed for his administration.
Here is a list of those changes. The article provides a broader based explanation of the changes:
- Reducing federal estate, gift and generation skipping tax exemption to as low as $3.5 million instead of the current $11.7 million.
- Eliminating discounting techniques.
- Taxing grantor trusts in the grantor’s estate.
- Eliminating step up in basis at the time of death.
- Limiting the generation skipping exemption to a specific number of years.
- Reducing the gift tax free annual exclusion which is currently $15,000 to as many individuals as the taxpayer wishes.
- Increasing income taxes for high earning taxpayers.
- Capping the benefit derived from income tax deductions and for upper income taxpayers the elimination of up to 80 percent of their deductions.
- Broadening the 12.4 percent Social Security tax from $142,000 to $400,000.
- Eliminating tax free exchanges of real estate under IRC Section 1031.
- Imposing an annual wealth tax.
- Limiting the size to which IRAs and other retirement accounts can grow.
When you take the time to examine these twelve proposed tax increases you will realize they could have a severe impact on the people who are already paying most of the taxes.
See more in this Wealth Management article, Twelve Potential Biden Tax Changes to Keep an Eye On
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