2. Long-term capital gains (when you sell an asset for more than its purchase price after holding it for more than a year) will be taxed at 39.6% on income above $1,000,000.
3. The taxation of Social Security is altered as well with income over $400,000 being subject to Social Security tax. This differs from the previous rule which capped the Social Security tax at an income level of $137,700. An unusual taxation gap exists where the excess above $137,700 but less than $400,000 isn’t subject to Social Security tax.
- On the business side of things, the corporate tax rate is increased from 21% to 27% and the deduction for the qualified business income deduction is phased out for taxable income over $400,000.
So, does Biden’s tax proposals affect your tax situation? As you’ve noticed, the $400,000 income figure is critical in these changes, so depending on your income level, your taxes may be increased but if not, it never hurts to be in the know about the tax system. Whether you are affected by the new tax regulation or not, tax planning is of paramount importance as part of comprehensive financial planning. This is where we come in! Our Lockheed Martin Retirement Specialists keep up with the latest tax law changes and we will analyze your financial situation to determine how to minimize your taxes. If saving taxes excites you, book a complimentary meeting to determine if our services are right for you!
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Be sure and check back next week for more incredibly valuable information. Cheers!
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Lockheed Martin Retirement Specialist is not an official title or professional designation nor is it conferred by Lockheed Martin on any individual or company.
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