The past week has been even more tumultuous than most Americans expected. Certainly more than most Americans would like to see in our divided nation. Although it will likely be into early 2021 before we will have clarity on the control of the United State Senate due to the runoffs in Georgia, it is important that everyone take time to plan for each of your futures.
- If you have a joint net worth of $7M or more, or above $3.5M if you are Single, there is a strong likelihood that your heirs could now see the amount of Federal Estate tax they have to pay upon your death to be much higher. This could change in 2022, but a change in 2021 would not be out of the question depending on what happens in Georgia. We are holding an Estate Planning seminar on November 13th. If your estate is above the thresholds noted above, you should sign up to hear some planning ideas.
- Income tax rates are likely to rise for those with taxable income over $400,000. Again, that may not happen until 2022, but 2021 is not out of the question. Depending on your future expectations for 2021 and 2022, this may be one of those rare years where you want to hold off accelerating deductions into 2020.
- Capital Gains Rates could be rising for those with taxable incomes over $400,000. If you are in this income range, you should look at a re-evaluation of your portfolio and look at the tax structure of your holdings to reduce annual capital gain income for the coming years.
- Corporate Tax Rates could be rising by 33% from the current flat rate of 21% to 28%. This should be considered in your year-end tax plans.
- Social Security tax on income over $400,000 may be assessed in the future. Therefore, you should look at addressing your compensation arrangements if you are in this range to avoid what would be an additional 12.4% tax on income over $400,000 for you and your employer combined.
We plan on having a year-end tax planning webinar in early December and we will be in touch on that shortly.
Stay healthy and let us know if we can answer any questions.