While there’s still so much debate going on with the fate of our country, there’s one clear thing, Biden’s proposed tax plan may result in a significant tax increase for some if passed.
Every day that goes by could be a missed opportunity to take advantage of current law. The new tax plan could be passed anytime this year or in the coming years. If passed this year, it could be made retroactive as early as January 1!
Not sure if this will impact you? Here are the highlights of what’s included in Biden’s proposed tax plan:
1) New taxes on people who make over $400,000 and changes in capital gains taxes.
2) Ordinary income tax bracket changes and an increase to the top tax rate!
3) A repeal of the qualified business income deduction for people who make over $400,000/year.
4) Decreases the Federal Estate and Gift Tax Exemption by roughly 70% to $3.5 million at death and $1 million in lifetime gifts (currently it’s $11.7 million for a single person, double for married).
5) Eliminates the step-up in basis tax rules that currently saves heirs an astronomical amount of money on capital gains in many cases.
6) Limits retirement plan tax incentives for high-income earners to 26% through a credit. 7) New 28% cap on the value of itemized deductions.
The good news is, we may be able to help you, if you act now!
While no one can say for sure if it will happen this year, there’s no reason you need to sit on the sidelines to wait and see if it does. Here’s how we can help you plan under the current law:
1) We’ll design a plan for you that takes advantage of available planning and gifting strategies that will minimize or avoid risk to your heirs.
2) If you have an income of $1 million or more, we’ll help you craft a strategy to take advantage of the current long-term capital gains preferential rates and avoid having them taxed at the top ordinary income tax bracket.
3) We’ll help you decide whether it’s best to pass your IRA and qualified plan assets directly to your heirs or to your trust.
If you wait, you may miss your chance to save yourself and your heirs from significant tax consequences if things stay the same this year.
Click here to schedule your appointment with Metairie attorney, Ronald “Chip Morrison, Jr. Mr. Morrison is a board-certified estate planning attorney with experience in both simple and complex estate matters and is a member of the American Academy of Estate Planning Attorneys. He has been engaged in the practice of law for the last 16 years. Mr. Morrison can prepare an estate plan for you that achieves your goals of passing your assets to whom you wish. The planning can even help minimize estate taxes. Our firm serves clients throughout southern Louisiana. For more information, please call our office at 504-831-2348 or email kim@morrisonlawplc.com
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