This presidential election has certainly been unprecedented with everything going on in the world, and the fact that it is happening during a global pandemic has made it even crazier. With the state of the world being so, well, 2020 right now, there is a lot to consider before you cast your vote for who will lead us into the next four years. So, with so many changes on both presidential candidate’s agenda, how will the results of the 2020 election effect your taxes? Let’s cover a few points!
First, let us cover presidential candidate, Joe Biden’s proposed tax plan. Probably one of Biden’s most talked about proposals is his move to raise taxes on individuals who are making an income of over $400,000. This includes individual income tax, capital gains, and payroll taxes. Some other features of this tax plan include:
- Raising the corporate income tax rate and imposing a corporate minimum book tax
- Raising tax revenue by $3.3 trillion over the next decade, which, on a conventional basis, would collect $2.8 trillion
- By the year 2030 this tax plans estimates to have a 7.7% less after-tax income for the top 1% of taxpayers and about a 1.9% decrease for all taxpayers on average
President elect, Donald Trump’s proposed tax plan looks a little bit different from Biden’s. Trump’s Tax Cuts and Jobs Act is the largest overhaul of tax code in 30 years! Some major points of Trump’s tax plan include his two policy proposals that will bring back jobs from China. The first of these proposals is an unspecified tax credit for companies that bring jobs back state side, and the second is 100% expensing for certain industries that bring manufacturing back to the United States. Other features of this tax plan include:
- Single corporate tax rate of 21%
- Many of the tax benefits set up to help individuals and families will expire in the year 2025
- Middle-class tax cuts in the form of rate reductions
We may still be waiting to find out who the next president will be, but you don’t have to wait when it comes to getting educated on your taxes! For more tax tips and alerts, be sure to check out the rest of our blog posts!