top of page

What to Expect from Biden's Tax Plan

Every January when people are awaiting the arrival of their W2 and 1099, nerves set in knowing that a portion of your earnings will go to taxes. With Joe Biden becoming the 46th President of the United State, it is not uncommon for people to wonder what we can expect from his administration when it comes to taxes.


Biden will likely be quickly making changes to portions of the 2017 tax act signed by former president Donald Trump. The Tax Cuts and Jobs Act of 2017 made several changes to the tax code that affected American families. This included expansion of the standard deduction and child tax credit, doubling of the estate tax exemption and reform of the alternative minimum tax. It also reduced taxes for the highest earners and corporations, the first areas President Biden is expected to target.


Biden has proposed raising the marginal income tax rate from 37% to 39.6% for Americans who earn more than $400,000. Those who make more than $1 million annually also would pay 39.6% on long-term capital gains and investment incomes under his plan.


Michael Hammelburgerm CEO of The Bottom Line Group said “This will affect their net earnings but make economic equity more visible”.


Retirement


Biden also intends to change that way that taxpayers contribute to retirement plans, incentivizing lower-earning and middle-class Americans to save for the future. Currently, contributions are considered deductions from overall earnings come tax time instead of credit, and Biden wants to flip that. Lower earners would get a bigger tax break in advance, while they’d shrink for higher earners.


It is said that under Biden’s proposal, every dollar you contribute will not be deductible, but instead, for every dollar you contribute, 26 cents will be deposited into your retirement account as a matching contribution. Money will be taxable when you withdraw the money, benefiting those who invest in traditional IRAs and 401k’s, putting them closer to equity with those who make Roth IRA contributions since credits are always more valuable than deductions.


Homebuyers


Biden has proposed that first-time homebuyers would get a $15,000 tax credit. It would be paid as a credit right away for help with a down-payment, rather than waiting until tax returns are filed the following year. First-time homebuyers are considered those who haven’t owned a home in the past three years.


Unfortunately COVID-19 comes into play once again, exacerbating an already short supply of housing inventory. A new group of buyers armed with a tax credit toward a down payment could further increase selling prices, keeping prospective buyers out.


Disabled and Seniors


It is suspected that the disabled and seniors will benefit from the Biden administration. Once again, Biden has proposed increased tax credits for both employers that hire those with disabilities and to family caregivers. Biden supposedly also plans to expand access to Achieving a Better Life Experience (ABLE) accounts, which provide tax-advantaged saving accounts for people with disabilities to help pay for some expenses.


Finally, Biden plans to increase tax benefits for elerdly Americans who pay for long-term care insurance with their retirement savings. He wants to allow low-wage workers over age 65 to claim their earned income tax credit, where currently you can’t claim it if you’re over 65.




This post is meant to take a non-partisan, educational approach to the Biden tax plan, so that people are able to gauge a better understanding of what is to be expected. If you are feeling nervous about tax-season, we have professionals here at Penny Lane Financial who can help you come up with a tax plan that works for you.





0 comments

Recent Posts

See All

Comentarios


Get expert advice from a local and friendly company. 
CONTACT US
ADDRESS
OFFICE HOURS
PHONE
EMAIL

1804 W Union Ave, Suite 202, Tacoma, WA 98405

Monday to Friday

9:00 am - 5:00 pm

253-327-1177

You can also visit us; we'd love to meet you.
Penny Lane Financial - Trust and Expertise in Financial Services.

Important Disclosures

Equal Housing Lender:
Penny Lane Financial, LLC is an Equal Housing Lender. As prohibited by federal law, we do not engage in business practices that discriminate on the basis of race, color, religion, national origin, sex, marital status, age (provided the applicant has the capacity to contract), because all or part of the applicant's income derives from any public assistance program, or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act.

NMLS Consumer Access:
Our NMLS number is 1905686. WA – MB1905686 AZ – 1034711  You can verify our licensure status and find more information about our company at the NMLS Consumer Access website: https://www.nmlsconsumeraccess.org/ WA – MB1905686 AZ – 1034711

Terms and Conditions:
The loan terms and conditions provided by Penny Lane Financial, LLC are subject to change without notice. All loan approvals are subject to underwriting guidelines and credit approval. Not all applicants will qualify. Interest rates and annual percentage rates (APRs) are based on current market conditions and are subject to change.

Mortgage Loan Information:

  • Loan Types: We offer a variety of mortgage loan options, including fixed-rate mortgages, adjustable-rate mortgages (ARMs), FHA loans, VA loans, and jumbo loans.

  • Interest Rates and APRs: The interest rates and APRs provided on our website are estimates and are subject to change based on market conditions and borrower qualifications. Please contact us for the most current rates.

  • Loan Fees and Costs: Mortgage loans may involve fees, including origination fees, appraisal fees, credit report fees, and other closing costs. These fees will be disclosed to you during the loan process.

Consumer Rights and Responsibilities:
As a borrower, you have the right to receive a Loan Estimate within three business days of submitting a complete loan application. This document provides important details about the loan terms, estimated costs, and other important information. You also have the right to receive a Closing Disclosure at least three business days before your loan closing, which outlines the final terms and costs of your loan.

Homeownership Counseling:
If you are experiencing financial difficulties or have questions about your mortgage loan, you may seek assistance from a HUD-approved housing counseling agency. For a list of HUD-approved counseling agencies, visit the HUD website at https://www.hud.gov/program_offices/housing/nationally_hud_approved_housing_counseling_agenciesdirectory

 

Insurance License:
Penny Lane Financial, LLC holds life, disability, property and casualty insurance licenses in WA and AZ, NPN #17702278. We are committed to providing comprehensive financial services, including insurance products, to meet the diverse needs of our clients. Regulated by Washington State Insurance Commissioner at https://www.insurance.wa.gov/

Privacy Policy:
We are committed to protecting your privacy and ensuring the security of your personal information. For details on how we collect, use, and safeguard your information, please review our privacy policy here.

Contact Us:
If you have any questions or need further assistance, please do not hesitate to contact us at 253-327-1177 or email to vip@pennylanefinancial.com.

Penny Lane Washington

Check us out  

Penny Lane Financial NMLS #1905686 WA State, NMLS #1034711 AZ State

 

  • Instagram
  • Facebook
  • LinkedIn

NMLS Consumer Access - click here

EQUAL HOUSING LENDER

 

All Rights Reserved © 2017 - 2024 Penny Lane Financial LLC .

bottom of page