Planning Newsletter - Oct 2020

Planning Newsletter - Oct 2020 (click image to open)

• Tax code changes often take place after major elections in which one party replaces the other.

• The Biden tax plan has pledged not to increase taxes on taxpayers earning less than $400,000 a year.

• Capital gain and dividend tax rates would go up on taxable incomes over $1,000,000.

• The Biden tax plan would also eliminate the Qualified Business Income (QBI) tax deduction for business owners whose individual annual income is over $400,000.

• The plan would increase personal income tax credits such as the Childcare Credit, the Child and Dependent Care Tax Credit, the First Time Home Buyer Credit, and a new Care Giver Credit.

• It proposes to eliminate the step-up in cost basis on assets at death.

• The plan also proposes to reduce the exclusion amount for estate and gift taxes by 50% from the current amount of roughly $11.6 million per person to roughly $5.8 million per person.

• It is important to be familiar with the current tax code and any changes that may be enacted so you can plan accordingly.