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Are your taxes going to change with Biden presidency?

Writer's picture: Yulia Langolf, CPAYulia Langolf, CPA

It depends on how much you earn.

Taxes of lower-income taxpayers’ are intended to be cut. Biden proposes refundable credits for paying childcare costs and buying a new home. Child tax credit is intended to be increased from $2k to $3.6k for each qualifying child, and much more.

At the same time Biden intends to raise taxes by about $3.5 trillion on corporations and individuals earning more than $400k annually. You should remember that we have a progressive tax system, meaning that we pay higher rates as our income increases. Under the current structure, those rates for ordinary income begin at 10% and climb to 37%. Biden has proposed to raise only one top rate of 37% to 39.6%. Moreover, Biden would increase the top rate on long-term capital gains and qualified dividends from 20% to 39.6% for taxpayers making more than $1million. Biden found a way to secure the solvency of the Social Security fund. How? He proposed to raise payroll taxes, again for those earning more than $400k a year. Biden also proposed the elimination of the 20% qualified business income deduction, again for those earning more than $400k.

Do you think Biden’s proposal is good for our economy???


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