What the 2020 election could mean for your taxes
During our webinar, tax professionals discussed what the 2020 election could mean for your taxes, including former Vice President Joe Biden’s proposed tax plan. However, these proposals may never become law, and nothing here is individual advice.
Isaac Wakszol, President, and Jacobo Taurel, Managing Director at Activest Wealth Management, worked through key questions with Mike Vidal, CPA, JD, Tax Partner, and Moises Szyller, CPA, Tax Manager at Cherry Bekaert. We recorded the event on Tuesday, December 8, 2020, at 3:00 PM (EST). As a result, it reflects proposals as of that date.
This summary outlines the themes the panel covered and offers general context for each one. In addition, it points you to the full recording so you can hear the discussion in the speakers’ own words. The goal is to help you prepare better questions, not to predict how any law will turn out.
What the 2020 election could mean for your taxes: topics discussed
- Inheritance taxes.
- Taxes on capital gains.
- Income taxes for individuals and corporations.
- Ways families may prepare for possible changes.
Why inheritance taxes came up
Estate and inheritance taxes affect how families pass wealth to the next generation. For example, a change in how much of an estate the tax rules shelter could alter what heirs ultimately receive. The panel therefore spent time on how proposals might affect families who plan to leave assets to children or other loved ones. Of course, any change would depend on Congress and not on campaign statements alone. Families with existing estate plans may simply want to know which parts of those plans could deserve a second look.
How to read the capital gains discussion
Capital gains taxes apply when you sell an asset, such as stock or real estate, for more than you paid. In practice, the timing of a sale can matter as much as the rate itself. The speakers discussed how proposed changes might influence decisions about when to sell. Meanwhile, they reminded attendees that selling purely for tax reasons can create other risks. Above all, investors may want to weigh taxes alongside their broader goals, their time horizon and their comfort with market swings.
Where income taxes for individuals and corporations fit
Income taxes touch nearly every household and business. First, the panel looked at individual income taxes and how proposals might affect different earners. Next, the conversation turned to corporate income taxes, which can influence company earnings. As a result, corporate tax changes can also shape investment returns. In other words, a change aimed at businesses may reach individual investors indirectly. However, the details of any final law could differ from the proposals the panel discussed.
Planning ahead: what the 2020 election could mean for your taxes at home
Families often ask how to prepare when the rules might change. Fortunately, a few general steps can help, whatever the outcome in Washington.
- First, review your current financial plan so you know where you stand today.
- Next, gather recent tax returns and statements for your advisors to review.
- In addition, write down the questions that matter most to your family.
- Finally, revisit your plan once any new law takes shape.
Understanding what the 2020 election could mean for your taxes is only a starting point. Instead of acting on headlines, many families choose to wait for final legislation and then adjust. Most importantly, each situation is different. A strategy that suits one household may not suit another, so personal advice from a qualified professional remains essential.
Questions to bring to your advisors
The webinar format let attendees hear two perspectives at once. For instance, wealth managers can speak to investment strategy, and tax professionals can speak to filing and compliance. Together, they can help you see how the pieces connect. If you have questions after watching, consider bringing them to your own tax and financial professionals. They can then relate the general ideas from the discussion to your specific circumstances.
Finally, the recording of the event is available here.
