The window of opportunity to act before taxes are hiked is about to close.
At Tuesdayâ€™s State of the Union message, President Biden will likely talk about his plan for higher taxes, which he campaigned on. The details of the Presidentâ€™s plan to end the step-up basis on inheritances is perhaps the most significant change.
Other tax proposals Mr. Biden campaigned on include a sharp reduction in the favorable treatment on profits from investments, a new top tax rate of 39.6%, and expansion of the 12.4% Social Security tax if you earn more than $400,000 in adjusted gross income annually..
Itâ€™s possible the tax hikes about to be negotiated in Congress could be retroactive, which would make planning maneuvers fruitless. Thatâ€™s unlikely, however, but the window of opportunity to act is about to be closed.
If your annual income is higher than $400,000 or your family has an estate worth more than $3.5 million, please let us know if you have questions.
Despite details of the coming tax hikes on wealth and investments emerging in press reports this past week, the Standard & Poorâ€™s 500 stock index closed Friday at 4,180.17 â€“ a gain of +1.09% from Thursday and down -0.12% from last week, ending a four-week winning streak. The index is up +60.54% from the March 23rd bear market low.
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