Year-End 2020 Tax News & Planning Strategies
Biden’s Proposed Tax Plan – Summary and Key Comparisons
by Ron Dean, CPA, Partner, Restivo Monacelli LLP
President-elect Joe Biden has announced a tax plan that departs significantly from the policies and impact of major tax revisions enacted in 2017 under the TCJA. Restivo Monacelli's tax team has summarized the key elements of his platform on taxes, as currently available, and provides a side-by-side comparison.
The top individual federal income tax rate would rise from 37% to the pre-Trump rate of 39.6%.
The corporate rate would rise from 21% to 28%; a 15% alternative minimum tax would apply to corporate book income of $100 million and higher.
Individuals earning $400,000 or more would pay additional payroll taxes.
The maximum eligible expenses for the Child and Dependent Tax Credit would rise from $3,000 to $8,000.
Tax relief could be offered for student debt forgiveness and the first-time homebuyers credit would be restored.
The estate tax rate would increase by 5% and exemptions would decrease from $11.58M to $3.5M.
It is important to note that all these changes would need to be enacted by Congress in order to become law. Regardless, Biden's plan will likely impact your taxes moving forward, so it is important to understand and plan accordingly. If you have any questions or would like to discuss how this impacts you or your business, we encourage you to reach out to one of our tax specialists at Restivo Monacelli LLP.