Date: May 29, 2021
President Biden is expected to announce a $6 Trillion dollar budget today and if passed, it will potentially include the word “retroactive” as it relates to tax hikes.
This is A BIG DEAL and the past history of major tax policies did not previously account for retroactive changes, except for 1993…
Inside of the American Families Plan, President Biden proposed to increase the top tax rate on capital gains to 43.4% from 23.8% for households with income over $1 million.
And if it’s retroactive, it may be put into place as of April 28th, 2021, not allowing investors to sell their investments prior to the changes.
Just a few other things to look out for in the coming legislation:
- Corporate tax rates at 28%
- Top tax bracket increased to 39.6%
- Child tax Credit increased and make permanent
- Capital Gains rate will increase to top income bracket of 39.6%
- Potential removal of real estate tax breaks, including 1031 exchange
- Increase in W-2 FICA taxes for individuals making over 400k.
Also, note it is possible these changes are retroactive for 2021.
If you want to walk through this together, schedule here.