In this episode, we dive into what Biden is proposing with the new tax plan, how it may affect business owners, and how you can begin determining what actions make sense for your situation.

While nothing has been passed yet, President Biden has proposed the American Families Plan, which would substantially change tax rates for high-income individuals. 

One aspect of that reform includes increasing the long-term capital gains rates (for those with income over $1 million). 

Historically, long-term capital-gains (assets held for more than a year) have had preferential tax treatment. Depending on your income, LTCGs are taxed at either 0%, 15%, or 20%. For those lucky enough to have over $500k in income (roughly), Long-Term Capital Gains are taxed at 20%, which is much lower than the Ordinary Income Tax Rates for people at that income level, which could be around 35-37%.

So What Is Biden Proposing?

The American Families Plan would eliminate the preferential LTCGs rate for those with income over $1 million. Meaning, LTCGs over $1 million would be taxed at their Ordinary Income Tax rate, which could be as high as 39.6% under the new proposal (since Biden is proposing increasing the highest rate from 37% to 39.6%).

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Disclaimer
This podcast is not intended to provide financial or tax advice. The information, services and other content provided on and through this podcast, including information that may be provided in the show notes (directly or via linking to third-party sites), are provided for informational purposes only. Please consult with your tax, investment or other financial professional regarding your personal financial situation.