{"id":3856,"date":"2021-02-13T14:33:49","date_gmt":"2021-02-13T14:33:49","guid":{"rendered":"https:\/\/patellawoffices.com\/blog\/?p=3856"},"modified":"2021-02-13T14:33:51","modified_gmt":"2021-02-13T14:33:51","slug":"new-tax-laws-predicted","status":"publish","type":"post","link":"https:\/\/patellawoffices.com\/blog\/planning-for-tax-minimization\/new-tax-laws-predicted\/","title":{"rendered":"New Tax Laws Predicted"},"content":{"rendered":"\n<p>When elected, most Presidents have successfully enacted many significant tax proposals in the first two years in office. <\/p>\n\n\n\n<p>President Biden is\ndoing things a little differently. Because of the coronavirus pandemic, Biden\nhas divided his tax proposals into two efforts. <\/p>\n\n\n\n<p>In the immediate short\nterm, he is seeking to quickly enact COVID-related relief for individuals and\nbusinesses. President Biden proposes a relief package that includes provisions to\nhelp individuals who have lost incomes due to the COVID pandemic and businesses\nthat have been forced to shut down or restrict operations. Many of these\nproposals are extensions of provisions enacted in 2020 that have expired or sunset\nsoon.<\/p>\n\n\n\n<p>In the long term,\nBiden\u2019s tax proposals include provisions that focus on growing the economy\npost-COVID.&nbsp; He hopes to enact tax reforms\nfocused on tax increases on wealthier individuals and corporations, tax breaks\nfor lower income taxpayers, and tax provisions to promote domestic job growth\nand clean energy.<\/p>\n\n\n\n<p>But when will these\ntax increases occur? I predict that the tax increases will be enacted for next\nyear in 2022.&nbsp; Why? Because tax laws take\ntime. Also the slim Democratic majority in congress will prevent fast track\nlegislation and require time to negotiate and compromise with conservative Democrats\nand moderate Republican legislators. <\/p>\n\n\n\n<p>Will the tax laws be retroactive\nto 2021?&nbsp; Probably not. While retroactive\ntax legislation is constitutionally permitted, it is unfair (and politically unpopular)\nto change the laws in the second half of 2021 after taxpayers\u2019 reasonable reliance\non the laws in their tax planning and transactions. <\/p>\n\n\n\n<p>I predict the\nfollowing tax law changes:<\/p>\n\n\n\n<p><strong>Individual tax increases:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Raising the top individual tax bracket back to 39.6% with no tax increase on those with incomes less than $400,000<\/li><li>Eliminating the low capital gains tax rate for individuals with incomes over $1 million<\/li><li>Placing a cap on itemized deductions for wealthier individuals <\/li><li>Increasing the SALT deduction for state and local taxes beyond $10,000 <\/li><li>Returning the estate tax exemption amount to pre-Trump levels of $5.0 million<\/li><li>I do not expect an elimination of Basis \u201cStep-up\u201d at Death, which currently (and favorably) increases the income tax basis on the date of death to its fair market value as of the date of death. Many previous government attempts to eliminate the basis step-up at death have been unsuccessful.<\/li><\/ul>\n\n\n\n<p><strong>Business taxes:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Raising the top corporate tax rate to 28% from 21% and phasing out the 20% qualified business income deduction<\/li><li>Imposing a minimum 15%tax on large corporations, imposing additional taxes on businesses that shift jobs overseas, and more tax breaks for businesses that increase domestic jobs<\/li><\/ul>\n\n\n\n<p>While numerous uncertainties exist, all clients should familiarize themselves with Biden\u2019s tax plans, and position themselves to act in case of new laws. \u00a0Some clients have already started income and estate tax planning and consultations in anticipation of the expected tax law increases. \u00a0Please reach out to our office with questions or\u00a0<a href=\"https:\/\/docs.google.com\/forms\/d\/e\/1FAIpQLSccrs3grYYqwYRaYsjdPGOyTVV-4F4MQJEzarvKMyrOTyvjwQ\/viewform?usp=sf_link\">complete this form<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>When elected, most Presidents have successfully enacted many significant tax proposals in the first two years in office. President Biden is doing things a little differently. Because of the coronavirus pandemic, Biden has divided his tax proposals into two efforts. In the immediate short term, he is seeking to quickly enact COVID-related relief for individuals [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_daextam_enable_autolinks":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-3856","post","type-post","status-publish","format-standard","hentry","category-planning-for-tax-minimization"],"_links":{"self":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts\/3856","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/comments?post=3856"}],"version-history":[{"count":1,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts\/3856\/revisions"}],"predecessor-version":[{"id":3860,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts\/3856\/revisions\/3860"}],"wp:attachment":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/media?parent=3856"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/categories?post=3856"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/tags?post=3856"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}