How President-Elect Joe Biden’s Tax Plan Could Affect Your Assets
Now that Joe Biden is the president-elect of the United States, many people are looking to learn more about his tax plan and what it could mean for their financial situations. Each president has something different in mind when it comes to how individuals and companies should be taxed, and Biden’s plan will definitely affect some more than others.
Here’s what you need to know about Biden’s tax plan and how you can maintain control of your wealth through asset protection strategies.
The Top Federal Income Tax Rate
Under Biden’s tax plan, the rate for individual federal income tax would increase from 37% to 39.6%. If you earn an income of more than $400,000, then you would be affected by the Biden tax plan because additional payroll taxes will be due. However, people who earn less than this will generally be unaffected by tax rate increases because the rate changes are not aimed at low- and middle-income families. With regard to payroll taxes, the plan would also require an additional Social Security payroll tax on employers and employees after income of $400,000 is earned.
Corporate Tax Changes
For companies, the corporate tax rate would increase from 21% to 28% under the Biden tax plan. Corporations will also be subject to a 15% alternative minimum tax to prevent companies from making high profits from paying no tax at all.
Child and Dependent Tax Credit
If you have a child or dependent, the tax credit that you receive would go up from $3,000 to $8,000 under the Biden tax plan. For more than one dependent, that credit goes up to $16,000.
Student Debt Forgiveness
Student debt forgiveness is also part of the Biden tax plan, which offers some tax relief for people who have taken out loans for education. The big difference with this plan is that it would forgive student loan debt after 20 years without a tax liability.
Retirement Tax Benefits
Your retirement savings could be impacted by the Biden tax plan because this plan includes new rules to equalize tax benefits for retirement plan contributions. This is likely to have the most impact on high-income individuals.
Estate Tax Exemption
The Biden tax plan could reduce the estate tax plan exemption by about 50%, which would restore the taxable estate thresholds from what they were before the Trump presidency. We anticipate that this will drive more people to seek financial planning advice from estate planning lawyers to retain the maximum amount of wealth possible.
Asset Protection with Alatsas Law Firm
Of course, these brief overviews only highlight a few of the many aspects of the Biden tax plan, and we encourage you to read more about it to make the most informed decisions for your finances If you are concerned about your assets under the proposed Biden tax plan, Alatsas Law Firm can help. We know all the best asset protection strategies to pursue in these current circumstances to allow you to minimize your tax burden while still following the law.
In addition to helping you minimize your tax burden, we can also assist you with asset protection for estate planning and long-term care, if you’re going through a divorce, and in case a lawsuit is ever filed against you. We are available to walk you through the possible scenarios of how the Biden tax plan may affect you, so contact us today for a free consultation.