Are you ready for the changes we will see to the capital gains tax rate under Biden’s proposed tax increase? Do clients have access to information that can give them back a sense of control over their finances? The first half of 2021 has been full of change, and it's showing no signs of slowing down.
According to CNBC, the proposed Biden tax plan would cause 12 states to see a combined capital gains tax rate above 50% with California seeing the highest at 56.7%. Portland, Oregon and New York City would see even higher rates because of city taxes. For Portland, the rate would be 57.3 percent, and for New York City the rate would be 58.2%.
When rates are on the decline, Americans tend to worry less; however, when rates increase, clients turn to financial advisors to discuss strategies that can reduce the tax consequences of the most recent tax laws.
Some advisors have chosen to be proactive with clients, exploring ways to lessen the possible impact. If taxes rise, some clients may buy more life insurance to reduce, eliminate, or cover future tax bills and regain peace of mind. Additionally, those impacted may want to consider property appraisals to gauge their taxable growth and reveal how much life insurance they may need for those bills. If Biden’s plans happen, clients may want to be ready to “pull the trigger” on updating their retirement income strategy and estate plan.
Key Points to Consider:
- "President Joe Biden has asked for higher taxes on inheritances to help pay for the American Families Plan."
- "The proposal includes taxes for inherited property at death, excluding the first $1 million of gains."
- "These plans may make life insurance more compelling for estate planning needs, financial experts say."
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If you’re interested in learning how to prepare for Biden’s proposed tax plan, please reach out to your Field Support Representative today at 1-888-543-3776 to discuss your strategy.