Upcoming Changes to Your Taxes

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 How Will the New Administration Affect My Taxes?


    Many Americans are wondering how the Biden-Harris administration will be affecting their taxes in the coming years. According to multiple media outlets, the following alterations can be expected:

Income Tax
The most significant difference for income tax will be for individuals making over $400,000 annually; the tax rate will be increased from 37% to 39.6%, and these incomes may be subject to a 12.4% Social Security tax - to be split evenly between employees and employers. 

Corporate Tax
The Tax Cuts and Jobs Act reduced corporate tax from 35% to 21%, while Biden does not intend on raising it to its prior level, it is set to increase to 28%.

Capital Gains Tax
It is also expected that tax capital gains will be taxed at the same rate as households for those earning over $1 million. The current system allows for long-term capital gains to be taxed at a lower rate - 23.8%.

401(k)
There is a proposal to change the way retirement savings are treated in the tax code, as a method of giving lower-earners a tax break upfront. The specifics of this proposal have not been shared yet.


While these are the current plans and proposals, it is important to stay up to date and ensure that your                                                                       CPA does the same. 



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