2021-2022 Proposed Tax Changes
The Wiser team explains the new tax plan that has been proposed. Capital gains increase, income tax bracket changes, retroactive policies, and eliminating back-door Roths are a few of the highlights in this newly proposed tax plan. In this video we break down all the parts we think you need to know. Watch this video to find out if these tax changes could impact you!
Capital Gains – taxes are going up from 20% to 25%. This proposed to be retroactive. You will have to have had a sale done by September 13th, 2021 if the proposal is approved.
Income Tax – the highest bracket (39.6%) has moved down to $400,000 for single and $450,000 for married filing joint. This is a significant change. This income bracket it expected to be hit the hardest.
Back-Door Roths and Mega Back-Door Roths – this administration has proposed to get rid of them altogether. There would be a 10-year window encouraging taxpayers to convert to Roth accounts over that time.
If you have over 10M in a retirement account there will be a RMD of 50%, meaning you will be required to withdraw 50% of that money.
Grantor Trusts – they are typically used by wealthy individuals as estate planning tools. Right now they are saying that gains inside the trust must be taxed each year rather than being deferred to at passing in the estate planning. Defecting Grantor Trusts are effectively being eliminated.
S Corporation Owners – If your modified adjusted gross exceeds $400,000 for single or $500,000 for joint, you will be subjected to an additional 3.8% surtax on your income tax return.
The bill is highly targeted between the $400,000 and $500,000 income bracket.
If you’d like to learn more, here’s an article explaining the tax plan further.
Recent posts
Share This Story, Choose Your Platform!
Wiser Wealth Management, Inc (“Wiser Wealth”) is a registered investment adviser with the U.S. Securities and Exchange Commission (SEC). As a registered investment adviser, Wiser Wealth and its employees are subject to various rules, filings, and requirements. You can visit the SEC’s website here to obtain further information on our firm or investment adviser’s registration.
Wiser Wealth’s website provides general information regarding our business along with access to additional investment related information, various financial calculators, and external / third party links. Material presented on this website is believed to be from reliable sources and is meant for informational purposes only. Wiser Wealth does not endorse or accept responsibility for the content of any third-party website and is not affiliated with any third-party website or social media page. Wiser Wealth does not expressly or implicitly adopt or endorse any of the expressions, opinions or content posted by third party websites or on social media pages. While Wiser Wealth uses reasonable efforts to obtain information from sources it believes to be reliable, we make no representation that the information or opinions contained in our publications are accurate, reliable, or complete.
To the extent that you utilize any financial calculators or links in our website, you acknowledge and understand that the information provided to you should not be construed as personal investment advice from Wiser Wealth or any of its investment professionals. Advice provided by Wiser Wealth is given only within the context of our contractual agreement with the client. Wiser Wealth does not offer legal, accounting or tax advice. Consult your own attorney, accountant, and other professionals for these services.
