The recent change in leadership has drawn focus toward a new approach to ending this pandemic. Although we look forward to a time when every citizen is vaccinated, and our economy can begin to heal, there are other aspects of a new presidency to keep in mind. Biden’s proposed tax plan will have some changes that may affect you and your family.
During the last administration, we all adjusted to the Tax Cuts and Jobs Act of 2017. Biden’s plan includes repealing some aspects of the TCJA for high-income filers. Biden intends to raise the Social Security payroll tax to 12.4% for those earning over $400,000. The tax will be split by employees and employers and help fill in some of the gap of an aging generation and the fears of Social Security benefit stability. There are also benefits being expanded and restored regarding the Child and Dependent Care tax credit and renewable energy tax credits for individuals. There will be an increase to the First-Time Home Buyers tax credit, which was originally established during the Great Recession, as well.
Aside from individuals, Biden’s plan raises the corporate income tax rate from 21% to 28%. This plan would raise tax revenue by $3.3 trillion over the next decade. Of course, the next 12 months and this pandemic’s effect on the economy will also have a say in that tax revenue number.
Although there are no drastic changes to the individual’s filing requirements, consulting with a tax professional is always advised. Reach out to Sarah and Paige to find out more about how they partner with CPAs to help their clients file taxes efficiently.