Candidates run campaigns on promises and plans, but that doesn't mean they ever come to fruition. The Biden administration will maintain a Democratic majority in both the House and the Senate for at least the next two years, giving him a greater opportunity to push through his agenda. However, in light of more pressing concerns, don't expect quick action on his tax proposals.
Senior Citizens: Biden is proposing tax benefit changes for seniors paying for long-term care insurance using their retirement savings. He wants to allow low-wage workers over age 65 to claim the earned income tax credit. Additionally, he's pushing for a new $5,000 tax credit for "informal" caregivers such as family members.
Climate Change: Biden continues to push for a "Clean Energy Revolution" to slow the effects of climate change. This program includes restoring the electric vehicle tax credit, driving tax breaks for energy-efficient homes, and increasing tax incentives for carbon capture, use, and storage.
Opportunity Zones: Under this program, you can defer capital gains from selling a business or personal property by investing the proceeds in qualified opportunity funds (QOF), investments in economically distressed communities. Keep your money in the fund for five years, and your taxable gain on the original sale of the property is reduced by 10%; wait seven years and get an additional 5%. If you wait for ten years, the QOF investment is tax-free!
Disabled People: The President is looking to expand access to ABLE Savings Accounts through an Age Adjustment Act. This would make these accounts available to six million additional adults with disabilities, including one million veterans. He's also pushing for business tax credits when companies hire a person with a disability or make accessibility improvements.
There's much more to President Biden's tax plan – some positive and some negative – that could affect your wallet, so it's worth talking to a financial professional about any changes you need to make today. Call us today and let's review your retirement savings plan and make any necessary changes.
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[1] https://www.kiplinger.com/taxes/602109/president-bidens-tax-plans-for-the-next-few-years