(Reposted Blog From November 2020, They Are On Top Of It)
With the projected election of Joe Biden, Freeman Law has already begun to review what a Joe Biden presidency could mean to its clients. And although many of determinations could potentially depend on results from President Trump’s election challenges and a final tally of the United States Senate, Freeman Law wants our clients to be aware of the potential tax changes that could occur in the next few years under Joe Biden.
Increase in Top Marginal Tax Rate for High-Earners. Currently, the top federal tax rate is 37%. Mr. Biden has proposed increasing the top federal tax rate to 39.6% for those making more than $400,000 per tax year.
Investment Income. High-income taxpayers are currently taxed at approximately 23.8% on their net investment income, which includes capital gains and ordinary dividends. Mr. Biden has proposed maintaining these rates except for those taxpayers who make over $1 million. In these latter instances, Mr. Biden has proposed increasing the tax on net investment income to ordinary income tax rates of 39.6%.