From the snippets I've read of what Biden's intending with his tax plan, I offer all my friends some free advice:
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Be prepared to sell any inherited property. Biden wants to remove step-up basis, a cornerstone of American wealth inheritance. An example: If you inherit your dad's house worth $200,000 currently, and sell it for $200,000, you pay no tax. It's a wash because your basis in it is $200,000, or whatever it was worth when you inherited it.
Without step-up basis, your basis in that property would be for the original amount that was paid. So, you would be taxed on a gain that is substantial in most cases because of the way property appreciates in value.
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Be prepared to pay more in taxes, especially between 75k household and 175k household. This is because the increased standard deductions and lowered tax rates for people in this range are at risk, as well as the increased threshold for child tax credits.
It's likely to go back down to 100k phase out instead of 500k phase out for kid credits.
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Any gains the average person made under Trump is about to be thrown out, with interest. Capital gains rates will go up, and those don't only affect the rich. They affect anyone selling stocks, and that option is in a lot more hands thanks to apps like Robin Hood.
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If you don't have insurance, get it now - even if you have to suffer through the marketplace. That penalty is coming back. When it was suspended, it was taxing folks a flat penalty + 3% of their AGI.
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Up your withholding just to prepare for any changes we don't see coming.
This information is not political, just tax advice.
-Kenny
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