Joe Biden’s Proposed “Tax Overhaul” And What It Means For Investors

It seems like only yesterday the State of Georgia was counting the final ballots en-route to a 50/50 split in the Senate. With the new Democratic VP Kamala Harris getting the tiebreaking vote, it appears tax reform is on the way.

On the heels of unprecedented stimulus (with more planned), the bill is being targeted at households bringing home over $400,000 annually. For people earning less than $400,000 annually, the proposals include housing credits, child and dependent tax credits, renewed electric vehicle credits, student loan reform, and several other types of tax breaks. For those earning over $400,000, it’s a different story.

The full list of their assumptions can be found HERE, but we’ll highlight some of the proposals affecting individual investors earnings over $400,000: 

The Tax Policy Center has projected the reform to go live in 2022, but there’s no guarantee any legislation won’t be retroactive active for 2021, either.

Managing taxes is an important component of overall portfolio return and income generation. Furthermore, there’s an expected $60-70 trillion in generational wealth transfer through inheritance and gifting coming. The estate proposals will lead to a huge windfall for the IRS (if passed).

Everyone’s situation is unique, and I would suggest giving our office a call if you have questions on how your investments and financial plan might be affected.  And… I would imagine 2022 will be a smart year to find a great CPA if you don’t have one already.