On Tuesday, November 17th Mark Spaeth, Mark Vance & Brian DelVecchio with CLA joined CARW to talk about potential tax changes that we may see as we look to 2021. To begin, Mark Spaeth mentioned that we have seen tax changes issued in the last few years at a faster pace than he has seen in his entire career. The 2017 Tax Cuts & Jobs Act was significant followed soon thereafter by changes we are now seeing related to COVID.
As to whether there is a significant likelihood that the tax laws will change next year, all eyes are on the Georgia Senate races. Given that laws need to pass through the White House, the House of Representatives, and the Senate, what happens in 2021 is largely dependent on whether the republicans retain control of the Senate.
That being said, many people will have to make potential tax decisions before the end of the year without knowing the outcome of the January senate races. Here is a list of potential changes that have been mentioned.
Vice President Biden has proposed:
-Eliminating 1031 exchanges that are used by a wide range of taxpayers and allow you to sell a property, purchase another property and defer the tax, allowing you to save and reinvest
-Increasing capital gains taxes
-Major changes in estate taxes
-Increase in individual tax rate for individuals with over $400K of income
-Changes to the Opportunity Zones Program
-Increase the low-income housing credits
-Revive first time home buyer credit to $15K
-Expand child and independent care credit to $8K
-Social security tax of 12.4% to kick back in once your wages hit $400K
-Eliminate the 20% Qualified Business Income Deduction
The team recommended reaching out to your tax advisor sooner rather than later to understand how these proposed tax changes will impact you. We don’t know exactly when these changes will happen, but it is likely that there will be changes.
You can view the entire session HERE.